BusinessBusiness RecoveryNHS ends controversial accounting regime

NHS ends controversial accounting regime

Notorious 'double whammy' accounting rules to end for NHS trusts

The NHS has ended its controversial accounting regime that hit NHS trusts
twice if they posted a deficit.

David Nicholson,
Department
of Health
chief executive, said the end of the regime followed
Audit Commission recommendations to make a change. Reversing the regime, known
as resource accounting and budgeting,
ploughs £178m back into local NHS.

The Audit
Commission
said the old accounting rules were unfair because of the
‘double whammy’ effect under which overspending trusts not only had to pay back
their debts but received less income the following year as well.

‘The majority of NHS trusts have improved their financial performance over
the last year, meaning we are now in a position to complete modernisation of the
NHS financial regime,’ said Nicholson.

Overall, the NHS is expected to post a £13m surplus for the financial year
ending April, compared with a £547m deficit a year ago.

Further reading:

Moves to heal NHS financial ills

NHS deficit accounting faces surprise axe

Government promises to fix NHS accounting
regime

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