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It’s that time of year again when Finance Departments start to discuss the spectre of year end, and one which I find rather strange. Why should the year end be any different to a month end? Ok I grant you that there are a few more processes to go through, not least agreement of balances etc. but even a middle performing Trust should have a reasonable set of procedures each month end that mean that at year end nothing should be a surprise. But there are surprises!! Lots of them!! This to me says a great deal about the way the team is managed and led.
 
Each month end the figures produced should be robust and compiled from high quality working papers, but also cover all the material issues that can impact on the end forecast position. Credibility is on the line and finance teams should have this firmly in their sights when carrying out their duties as Boards should be not be given any excuse to think the unthinkable and outsource elements of the finance team.
 
There should be no great surprise that March every year that the forecasted position is the actual position, with only material and genuinely unforeseen items making the actuals different than the forecast.
 
This is not to say that every estimate and accrual has to be recrafted and reworked each month end, which may have the smallest of changes to that accrual, the materiality concept should be at the forefront of senior finance staffs mind when agreeing the month end routine.
 
Finance departments are full of staff who are creatures of routine and feel that they aren’t doing a quality job if they don’t check every last detail, but this does not add any value to the close down process, if the accrual is much the same every month. Remember we are dealing in millions here, think materiality at all times.
 
Credibility, why does this matter, after all as accountants we just report the actuals. Well I’m afraid that’s not strictly true, yes one of the roles of an accountant is to report accurately what has happened but equally as important is the ability to forecast the outturn. This is particularly the case in todays NHS, where Control Totals are paramount and there is less slack in the wider system to absorb any blips that may arise across the system.
 
Focus the team on that which is important and constantly review, this isn’t to check upon anyone it’s about letting as many pairs of eyes (and minds) look at the whole picture regularly. Peer group review can be a useful tool here, where colleagues question each other on what has been done, this will hopefully flush out the very obvious things and allow a broader based ownership of the out turn position. One where the team can monitor, review and adjust throughout the year to deliver what the team has been saying it will deliver through the year.
 
Crucial to this peer review is ensuring that the finance team is “hardwired” into the workings of the organisation and that they are seen an integral part of the service team, in much the same way a nurse would be part of the service leadership team. Understanding the business is not a new concept but its fundamental to the success of the finance team if they are a major part of the senior leadership of each service team, and then to provide the appropriate and considered view as to what is achievable at the year end.
 
See you on the other side!!

The newspapers and TV news broadcasts have all had coverage of the state of the current NHS and its ability to continue to operate on the same basis both now and in the future.

It is fair to say that the NHS is under massive pressure, this is despite the valiant work of the front line staff who fight tooth and nail to stem the tide of rising demand. Its also fair to say that the NHS across the country is trying really hard to look at alternative methods of delivering front line services, to make scarce resources go further, but also to provide higher quality services closer to patient and their carers homes.

Recent publications suggest that quality of care, and by definition therefore the costs of, services across the country need to be improved. This is the conudrum, Trusts face as they strive to deliver the challenging savings agenda they face over the coming years. 

My father used to say that if you do the same things all the time, why was I surprised when the same results happened. Its a simple saying but has some credence in todays NHS. Trusts will coming to squeeze the pips of their cost base, and try to deliver the 2% savings, year on year, but this is getting ever more difficult to sustain.

There is exciting times ahead in Greater Manchester where the whole of the conurbation is working together with both health and social care managed as one budget. This is designed to help take away the barriers that both health and social care find at ground level when they are trying to deal with the demands of increasing requirements for both health and social care at a time when budgets are incredibly tight on both sides.

Time will tell if the "devo manc" pilot will work but it won't be for the want of trying to make the scare resources on both sides of the debate go further to better the outcome for patients and service users.

More to come in the coming months, as I work my way through the exciting work across Greater Manchester.

I always think that in every NHS Finance Department at 5pm on 31st March each year that there is a collective singing of "Auld Lang Syne". Maybe I'm dreaming, maybe I'm just a little mad in the head but it always occurs to me at this time of year.

We are fast approaching a really busy period for Finance Teams (if ever there are quiet times these days!!) and we all start to think a little more like accountants as the Annual Accounts loom.

Now i'm sure there are a number of you who will be saying that you do that every working day, and that's great, but for those of us who don't, it does take me back to the training days and  making sure the windows and doors are on the right side, or else the journal entries will be the wrong way round.......I jest of course (honestly I do!!).

For those of you in Foundation Trusts the Annual Reporting Manual has been issued by Monitor, with a helpful little guide on what's new so we don't have to trawl the document as in previous years. It looks to me that the changes are not massively material and largely about presentation, which is good considering its now 22 days from submission.

There will be a lot of late nights and weekends worked over the coming weeks and this will go largely unnoticed across the Trusts but the hard work is appreciated by the Directors and Deputies who will get to add the finishing touches.

So...... Happy New Year!!!

As always, please get in touch if there is anything I can assist you with.

Stephen

Well most Trusts are well into developing their first draft operational plans into the final draft, but lots of uncertainties surround the development of the STP. This is the place based plan of health care across all providers and touches all stakeholders in the health and social care arena.

This is a great concept and one that should have been put in place long ago, lets face it the same 70% to 80% of people are seen by all the stakeholders, so why shouldn't services be joined up, I guess its the silo mentality that gets in the way. 

The short termism of the planning and allocation cycles, the targets and performance management regimes drive organisations down the silo route, but this has got to change. I like many others will be sat scratching their heads about what and how to construct such a plan.

Having said that this is an opportunity that cannot be missed, its a chance to plan services across sectors, boundaries and organisations. I hope we take it.

So for now it's get to first base, which is a signed contract, that delivers a control total equalling operational plan, this then allows a small amount of time to get our heads up and think about STP.

As always, if theres anything you need, please get in touch.

​Stephen

Well i'm sure you've all been waiting with baited breath for the long awaited Final report from Lord Carter of Coles, setting out his vision for the the way the NHS will rise to the efficiency and productivity challenge over the next few years.

I have to say its a weighty tome and has 15 main recommendations and well over 100 hundred other recommendations, but do you know what I actually think its a good report. I think its got some really sensible suggestions and ideas that Trust can pick up and run with that will directly and indirectly contribute to the efficiency agenda of all Trusts.

Don;t be fooled by the banner headlines that this is just about Acute Trusts, which all of it absolutely is, but there are lots of the recommendations that I believe all Trusts can look to for help with where to go to save money.

Ar its core its about making sure that those who are responsible for spending the money across the NHS absolutely understand what value they get for that expenditure, and there are lots of suggestions and helpful measures to assist Trusts in getting to grips with whats become an ever tougher job.

I've still to get my head around the Weighted Activity Outputs, and the other various measures that are suggested, as I think that you could get lost in trying to argue the value of those, and if you do, well I think you'll sort of missed the point really.

I'm looking to use the report as a way of re-emgerigsing the Trust I'm currently working at, to look at savings in a more structured way.

Go have a read, you'll find the report on the DoH website (www.gov.uk) you won't be disappointed.

Let me know what you think.

​Stephen

I am, of course, referring to the annual wrestle that its the commissioner and provider process to agree contracts for the coming financial year.

It's all got to be done and dusted by 31st March along with completing the Operational Plans and year end etc. The one new dimension, well i say new, is the concept of agreed control totals, set by Monitor and NHS England. For those of us, who are a certain age then we remember the days when a control total was a great thing.

The Regional Health Authority would decide on the allocation and we would wait with bated breath too get the next allocation letter to increase our allocation (or control total). The more that things change the more they stay the same, there is a french phrase for that but I'm rubbish at that language, except for ordering beer of course.

Why am i reminiscing about the olden days, when I'm supposed to be talking about agreeing contracts? Well its a tough call really for Boards to make that call, there is no offers on the table yet, so how can they know with absolute certainty what the offer will look like. Scenario modelling will help and its a vital tool in any Boards armoury so they can understand the level of risk they have when accepting or not the control total on offer.

Modelling, scenario planning is a vital tool for Boards, and accountants are best placed to help shape and undertake this type of work.

Take look around my site you'll find I've done lots of this type of thing, and I'm always full of ideas and helpful suggestions, so feel free to get in touch.

Cheers

​Stephen  

Sometimes the Finance Teams can seem like the bringers of bad news and the people who are always saying no. This is of course not true on the whole and the Finance Team tends to be valued by the General Managers and Clinicians in management. 

The key to any successful Divisional management team is a good blend of skills with the Divisional Accountant role supplementing the General Manager, Lead Nurse and of course the Clinical Director. Together in the right blend will mean that good things will be happening in that part of whichever hospital that maybe.

For me this is the exciting part of being an accountant in the NHS, being at the "sharp end" and helping make services better for the patients who rely on the hospital for their care and treatment. Working in tandem is a really rewarding part of the job and the one that perhaps can feel a bit daunting to a young recruit. My advice would be to embrace the job, get support from the right places at the right time but you will feel some real pride when a major project comes to fruition, I know i did, and its why I joined the service.

It's a two way street though and the divisional accountant has a crucial role in ensuring that his colleagues within the Divisional team have the requisite understanding of all things Financial for them to be able to see their way through when thinking about a new project.

Managers need a good all around knowledge of the bits of Finance that are the real issues for them, regular awareness raising is a great way to supplement the work of the Divisional accountant. 

It just so happens I have the very thing you might need, have a look round the website and give me a call if you need any awareness raising, either general or bespoke.

Have a good week folks.

​Stephen

Well this last few days certainly has bitten hard weather wise, I've had to take the scraper to my car, maybe this NHS planning round might not be as bad as some people have suggested.

Yes there are savings targets, yes that will be hard, but the inflation deflator is actually an inflator, and tariffs might actually work for the acute sector this time, but the big thing is the new Transformation and Sustainability Funding. 

Trust have to perform to their plans to get the funding but thats good, right? Trusts have performed in the past and theres been no incentive, now there is and I'm hoping this will help Trusts see their way through what could have been a very difficult planning round.

The first draft operational plan is due ion the first week of February with the final draft due first week of April, the challenge will be the Sustainability and Transformational Plan, the so called place based plans, easy in big cities, not so easy in the rural health economies, but at least its a start.

As always if there is anything I can help with, get in touch.

​Stephen

Welcome to the website of Sk Consulting 2015 Limited, I'd like to say a huge thanks to Les Findley without his fabulous design skills and huge dedication this website would still be a twinkle in my eye, thanks Les, you are a star.

I hope you find what you are looking for on my website and also through the services that I can provide to you and your organisation.

Its a massively busy period for the NHS as a whole and particularly for Finance staff who are busy forecasting, planning and doing all of the things required during the last quarter of the financial year.

I'll be blogging regularly and will be tweeting each day about the current topics and things that interest me. 

Feel free to get in contact if you have any requirements I would be happy to chat through with you around anything you may need assistance with.

I look forward to hearing from you.

​Stephen