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Running out of road
The various window dressings that have been applied to the NHS’ revenue position since 2014 have now largely run out of road, meaning providers will be embarking on the long-term plan from a worse position than the government may have realised.
Not only are these accountancy measures now unavailable to offset unplanned overspending, some of them will actually have to be reversed, placing an additional cost pressure on the revenue budget.
One early example is an update from the Royal Institute of Chartered Surveyors around accounting for asset lives, which is affecting dozens of providers. The update clarifies that a practice of extending the expected life of building assets, to enable less money to be left aside for repairs and replacements, does not comply with the official guidance.
Essentially, these trusts appear to have reported revenue “savings” by using a practice that was contentious within the valuation industry, and will now have to revisit their asset lives and face higher depreciation charges. The overall impact on the sector could be more than £100m.
What should worry Simon Stevens, who will now be responsible for the provider deficit, is the practice of “long-lifing” assets has been just one of an array of non-cash accountancy adjustments that trusts have used (often under encouragement from NHS Improvement and the Department of Health and Social Care) to improve their reported finances, while doing nothing to improve the underlying position.
If more of these earlier adjustments (which have totalled around £1bn) have to be reversed, then the provider deficit is going to be devilishly difficult to budge.
The latest revelations on the “toxic” culture in Sheffield Clinical Commissioning Group raise yet more questions about what’s going on there, and little by way of complete answers are being provided.
HSJ has recently learned NHS England was warned about “unrelenting bullying” by senior managers at the CCG more than a year ago, when a letter was written by an employee and sent to then chief nurse Jane Cummings in 2017.
This letter does not appear to have been taken into account when the national commissioner completed its recent independent investigation into the CCG. Why so?
The CCG has said the letter was thoroughly investigated and that it took action. That may be so, but there are unfortunately still many reports that the CCG is “not a happy place to be”. It’s fairly clear that there’s more to be done to improve culture in the CCG and - as always - that’s an issue for the leadership.