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The latest twist in the game of thrones at the top of the NHS has given even more power to Simon Stevens – but also makes him more vulnerable.
By taking over direct leadership of NHS Improvement, Mr Stevens assumes greater responsibility for the performance of the provider sector.
Poor performance in one high-profile area, accident and emergency, can potentially be side-stepped by changing the four-hour targets (a review is already taking place to this effect).
But financial performance will be harder to hide from.
Yes, there is significantly more NHS revenue available, but there is still lots of uncertainty around budgets that will have a huge impact on sustainability, such as social care, public health, training and capital.
The various window dressings that have been applied to the NHS’ revenue position since 2014 (including capital raids and some eyebrow raising accounting adjustments) have also run out of road, and mean providers will be starting 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 aside for repairs and replacements, does not comply with the official guidance. I will be reporting more on this imminently.
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 Mr Stevens is that 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 NHSI 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.