HSJ’s round up of the day’s must read stories and debate


Magic beancounting

If accountancy is more art than science, then NHS beancounting belongs in the surrealism gallery.

One increasingly fashionable “wheeze” being used by trusts is to revalue their estate in a way that is favourable to their headline surplus/deficit figure.

This produces some very handy savings for the individual trust, but like most accounting tricks, brings no real cash saving for the health service overall.

In fact, some trusts have paid specialist firms around £40,000 to carry out their revaluations, which means they will actually result in additional costs.

There are also concerns over the extent to which some trusts appear to have stretched the accounting guidelines, by valuing their estate on a purely theoretical configuration of services.

Although the revaluations are recognised in national accounting guidance, the Chartered Institute of Public Finance and Accountancy said they should only be “chosen to best reflect fair value”, and not with the intention to improve the reported surplus or deficit.

Yet, the dramatic rise in their use just happened to occur after NHS Improvement instructed trusts to use them “where advantageous” to headline performance.

Rob Whiteman, chief executive of CIPFA told HSJ the revaluations demonstrate that “bodies should not set their own accounting rules”.

While the national accounting standards are interpreted independently by CIPFA for local government and policing, the Department of Health and Social Care interprets the guidance for the NHS.

Scotch mist

Simon Stevens has spoken publicly about the prospect of NHS England’s accountable care organisation contract, which is the subject of two judicial review cases, being ruled against in court.

He told the Nuffield Trust summit on Friday: “Our view is it is possible to fund primary care, community health and hospital services in a combined way, in a way that is consistent with the statutory legal framework. That’s the point that’s being tested in the principle judicial review… If the courts say it is lawful, that clears that issue up once and for all, and if the courts say it isn’t, that’s obviously not an approach we will be doing.

“What we will be doing instead is the bulk of what the integration agenda looks like, which is the voluntary coming together of organisations… in integrated care systems. So I think this will bring welcome clarity in some senses to a discussion which has got aspects of scotch mist.”

Amusingly, given the overt anti-privatisation agenda of the campaign against the ACO contract, Mr Stevens indicated that stopping it would lead to more tendering of services in the areas currently seeking to use it.

He said: “If those parts of the country are not able to do these kind of combined funding arrangements, they are likely to see more procurements of components of community health services under the current framework, than if they were able to act differently in the way that they are proposing… That’s just a function of the current statutory framework.”