Moves to heal NHS financial ills

From the Audit Commission to the Healthcare Financial Management Association, calls have been made for a change from the dreaded ‘double whammy’ effect of resource accounting. This carries over a deficit into the budget of an NHS body for the next financial year, effectively hitting them twice over.

Health minister Andy Burnham agrees that change must be made to stop the NHS from falling to financial ruin, but has not committed to a timeframe for a new regime.

The problem revolves around creating a resource buffer or pool, which NHS and primary care trusts can dip into when times are hard. Experts have also highlighted problems with historic deficits carried by trusts – will the government wipe them off and let them start from scratch, or will the burden continue?

A potential move would be to wipe the deficits incurred through resource accounting, which is described by some as merely a distortion and not a real overspend. Resource deficits would disappear leaving the real cash debts accumulated by trusts.

Unwinding the scheme is even more complex when considering how Strategic Health Authorities juggled debts between their trusts.

So despite suggestions that a new regime would be in place for the beginning of the 2007/08 financial year, NHS finance professionals will just have to wait and see.