In addition to the “Review of the NHS financial Management and Accounting Regime”, the Audit Commission has published the following reports that refer to the impact of resource accounting and budgeting on the financial management of the NHS:
“Financial Management in the NHS—NHS (England) Summarised Accounts 2004-05” published on 8 June 2006;
“Learning the lessons from financial failure in the NHS” published on 11 July 2006.
The Audit Commission published its “Review of the NHS Financial Management and Accounting Regime” on 26 July 2006.
The departmental publication “The NHS in England: the operating framework for 2007/08” published on 11 December 2006 stated that although the Department accepted the rationale behind the Audit Commission’s recommendations on resource accounting and budgeting (RAB) it could not commit to implementation at that stage.
Before the final decision could be made we needed to be sure that national health service trusts had the financial discipline to operate outside the stringent RAB rules relating to income deductions following deficits. The improving financial position reported in “NHS Financial Performance Quarter 3” published on 20 February 2007 coupled with new tighter cash controls gave us the confidence that the changes could be made.
The final decisions were made in the period leading up to the announcement on 28 March 2007.
Guidance on the introduction of resource accounting and budgeting (RAB) was issued to the national health service during 2000. This was consolidated in “A guide to resource accounting and budgeting” issued by the Department’s Finance Directorate in February 2001. Copies of this document have been placed in the Library. It can also be found on the Department’s website at:
www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/Allocations/DH_4000346
Subsequent changes to financial rules for national health service trusts, including those relating to RAB, have been communicated to the NHS through a number of sources including the finance manual and manual for accounts.
(2) on which dates the Steering Group set up by his Department to oversee the implementation of the recommendations of the Audit Commission’s review of NHS financial management (a) has met and (b) plans to meet.
The Department has established a steering group to oversee the implementation of the recommendations made in the Audit Commission Review of the Financial Management and Accounting Regime in the National Health Service. The group held its inaugural meeting on 23 March 2007, to which the following representatives of the Department, Audit Commission, Treasury and NHS were invited:
Richard Douglas—Director General of Finance and Investment, Department of Health
Bill McCarthy—Director General of Policy and Strategy, Department of Health
Martin Foulds—NHS Financial Controller, Department of Health
Alastair MacLellan—Group Financial Controller, Department of Health
Andrew Stubbings—Head of Capital and Programme Investment, Department of Health
Andrew Laycock—Financial Head of Business Management, Department of Health
John Hall—Head of Health Team, HM Treasury
Andy McKeon—Managing Director Health, Audit Commission
Anna Simons—Private Finance Practice Leader, National Audit Office
Stephen Hay—Chief Operating Officer, Monitor
Peter Shanahan—Finance Director, West Midlands Strategic Health Authority
Colin Gentile—Finance Director, St. George’s NHS Trust, London
Alison Tonge—Finance Director and Deputy Chief Executive, Stockport PCT
Kevin Orford—Finance Director and Deputy Chief Executive, East Midlands SHA
Since that meeting, the group has continued discussions by correspondence. The future meeting structure is currently being reviewed in light of changes to responsibilities within the Department.
The allocation of resources to primary care trusts (PCTs) have not been revised. PCT allocations for 2006-07 and 2007-08 were made in February 2005, and for 2005-06 were made in December 2002.