RegulationCorporate GovernanceGovernment promises to fix NHS accounting regime

Government promises to fix NHS accounting regime

Government syas it will change controversial NHS accounting, following Audit Commission recommendations

The government has promised to review the NHS’ controversial accounting
regime.

The review, announced by health minister Andy Burnham, follows widespread
criticism of the
NHS’s
accounting regime,
which focuses on resource accounting and
budgeting.

Critics have blamed RAB for the damaging financial effect caused by carrying
over budget deficits occurred by NHS hospital and primary care trusts.

The Audit
Commission
said RAB made the task of recovery more difficult and
inconsistent with the trust financial regime.

It also recommended a ‘buffer’ or banking facility, to enable trusts to
borrow money as a safety net.

Burnham said, in response to questions from ministers, that the government
accepted the Audit Commission’s findings, but would not say when changes to NHS
accounting would be made: ‘We accept the Audit Commission’s analysis on RAB and
the rationale of its review. Overall, its application provides a strong
disincentive for overspending, but it is becoming clear that it is increasingly
unsustainable for NHS trusts.

‘I cannot commit to a timetable for the implementation of the Audit
Commission’s recommendations, partly because a resource buffer would have to be
created to cover NHS overspending centrally. I do commit, however, to accepting
the principle of what was put to us. We will bring forward further details
soon.’

Further reading:

Bills pile high as NHS fails to pay suppliers

NHS accounting jobs to go to India

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