BusinessCorporate FinanceNHS FDs forced into ‘tricks’

NHS FDs forced into 'tricks'

The pressure on NHS finance directors to break even could lead to accounting ‘tricks’, claim senior figures within the sector

The sentencing last week of Mid Essex Hospital Services NHS Trust finance
director Philip Neal to a 12 month behind bars for false accounting highlighted
the pressure on FDs to avoid reporting deficits.

Neal was convicted for submitting inflated valuations on land the trust was
to sell to report a £1m surplus in accounts for the financial year 2005-06 when,
in fact, the trust was £10m in deficit. Neal blamed NHS targets in his defence.

Noel Plumridge, a former FD of Kingston District Community Trust said:
‘There’s an expectation within some boards that FDs will pull a rabbit out of
the hat at year-end and FDs rise to it. It is about an expectation on the FD to
turn a deficit into a break-even, which means an accounting trick rather than a
change in reality of income and expenditure.’

Ian Perkin, former FD of St George’s NHS Trust said: ‘There is no good
picking on an individual ­ you have to create a healthier environment where
people don’t fear for their jobs if they report bad news.’

A spokeswoman for the Department of Health said: ‘The majority of trusts are
in surplus as a result of sound financial management and the efficient use of
resources. To suggest it is necessary to commit fraud is ludicrous.’

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