The NHS is facing a revolution in the way it does its financial business.
Driven by advances in technology and changing business practices, NHS finance departments in the future may bear little resemblance to their current-day counterparts, according to a new discussion paper from the NHS Executive.
The vision paper, published last week, suggests how finance services are likely to develop within the health service. It is eye-opening stuff as it raises the prospect of a smaller finance function and major opportunities for staff to spread their wings beyond finance and broaden their skills.
The document aims to raise awareness among staff about possible changes ahead and identify the skills staff will need to respond to those changes.
The consultation will lead to a revision of the finance staff development strategy towards the end of the year.
It concludes that in future the NHS will have a ‘leaner and more professional finance workforce’ and there will be ‘an overall reduction in the numbers of finance staff’. Inevitably it will be the potential job cuts that will catch the attention.
Time for change
This is not a notice to quit for huge swathes of finance workers. Far from it. The purpose is to ensure finance staff can adapt to the requirements of a modernised NHS, even if that means moving outside the traditional confines of the finance department. In any case, a reducing finance workforce is hardly new. Finance staff numbers fell by nearly 10% between 1994 and 1998. The last thing the NHS needs is an exodus of finance staff as demand is far outstripping supply.
‘We have seen a reduction in finance staff over the years and that could well happen in the future depending on how we develop the finance function,’ Colin Reeves, director of finance and performance at the NHS Executive, told Accountancy Age.
‘You only have to look at how technology is changing business practices in other sectors to know traditional financial roles are changing. Greater computerisation and moves towards shared services in the NHS are likely to continue this gradual reduction in numbers.’
‘This discussion document is not about cutting back on finance staff,’ he continued. ‘It is about identifying the skills finance staff need to make them relevant to the NHS of tomorrow. There will be changes across the finance function, from qualified accountants and students to non-qualified staff, and there is no reason for anyone to think they do not have a future in the NHS.
‘This exercise is about being proactive and making available the right development opportunities for the finance function to take advantage of.’
The Executive has been considering running basic financial services such as payroll and accounts payable from a small number of shared centres.
If implemented this would have a profound effect on the NHS financial landscape, although it appears the initiative will move forward more slowly than envisaged. Even without shared services, the paper flows associated with financial transactions should reduce.
The document suggests that orders and invoices, timesheets and expenses will all be generated electronically by suppliers, customers and non-financial health service staff, removing the need for finance departments to capture details of financial transactions.
‘A reduced number of staff will take on a quality control role,’ the paper suggests. At the same time, business managers and clinicians are likely to take on greater responsibility for some financial activities.
The paper is clear that major new roles are developing. While finance staff will spend less time compiling and distributing information, they will have more time for analysis and interpretation of information. The government’s obsession with best value will lead to an increase in performance management. Finance staff should be placed to lead on this work.
Other staff will move into more generalised business roles, advising specific services and perhaps taking on responsibility for functions such as procurement and IT.
Finance staff are expected to have to adapt for the future, any casualties are likely to be concentrated in areas involving transaction-based activities.
The Executive says it aims to provide education and development opportunities to all staff.
Jim Birrell, director of finance and performance of the NHS Executive’s North West regional office and chair of the finance staff strategy group which produced the report, insists the changes represent an opportunity, not a threat for finance staff.
‘We may see a reduction in the size of the finance function, but they won’t necessarily leave the NHS,’ he said.
The Executive would be delighted to see finance staff operating in other parts of the NHS. This would be in line with the NHS plan’s aim to break down staff demarcations.
It would also see an understanding of finance spread throughout the wider NHS.
Barry Elliott, chairman of the Healthcare Financial Management Association, which represents NHS finance staff, said the NHS finance profession had to modernise and he urged staff to embrace the changes and not be seen as the ‘forces of conservatism’. ‘It means being proactive in implementing the changes required of us as a function,’ he said.
The bottom line is finance staff have little option. The world is changing, and NHS finance must change with it.
Counting the cost of medical negligence DECLINING NUMBERS – NHS FINANCE STAFF
- December 1994: 16,173
- December 1995: 16,007
- December 1996: 16,062
- December 1997: 15,404
- December 1998: 14,567
SKILLS AND COMPETENCIES FOR THE FUTURE
- Business planning and investment appraisal
- Planning and analysis
- Business planning and investment appraisal
- Economic and statistical analysis
- Clinical effectiveness audit
- Consultancy and training
- Understanding of technological change and opportunities
- Understanding of accountability, management and resource arrangements of partner organisations and agencies.
Source: Preparing Finance Staff for a Modernised NHS, NHS Executive, September 2000.
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