The appointment of Richard Douglas as the NHS's new head of finance has been greeted with universal approval. But there are tricky times ahead, warns Paul Stephenson

At a time when trusts and health authorities are talking about the huge financial problems in meeting NHS plan targets, the appointment of Richard Douglas to take charge of health service finance has pleased finance directors up and down the land.

Mr Douglas was deputy to departing finance director Colin Reeves from 1996 to 1999, and the NHS is delighted to see one of their own landing the top job.

Such is their pleasure that none volunteer even a hint of criticism of reservation about him. He is universally seen as the best person for the job, who will be able to tell ministers just what needs doing.

What is clear, however, is that those responsible for the finances of trusts and HAs believe he will have a lot on his plate.

They say that the financial squeeze is as difficult as ever, not because they do not have extra cash, but because they are being expected to do so much more with that cash.

Mr Douglas will take up his post on 1 May, at a salary range advertised as between£82,341 and£120,249.

He says that his pay will be 'similar' to his current earnings as finance director for National Savings.

Interestingly, the announcement of his move comes at precisely the time of year that Mr Douglas always seems to shift jobs - presumably a reflection of the importance of the financial calendar.

Although Mr Reeves left the NHS last week, Mr Douglas will not replace him until May. This leaves Christine Dawes, deputy director of finance and performance, holding the fort during the particularly difficult period that marks the last weeks of the financial year.

And finance directors are warning that the coming weeks are looking sticky. Still, Mr Douglas boasts a fine CV.

Over the past 18 months at National Savings, his 'major achievements' have included the final resolution of 'black hole' accounting problems, which had been sharply criticised by the public accounts committee.

He also takes credit for the publication for the first time in over a century of accounts covering all National Savings products.

In his new role, Mr Douglas will be accountable to NHS chief executive and Department of Health permanent secretary Nigel Crisp.

He will be expected to advise ministers on the affordability of policy aims, and see through the amalgamation and reorganisation of the DoH finance directorate, rationalising work currently carried out in Leeds and London.

Barts and the London trust finance director Barry Elliott says Mr Douglas has the respect of finance directors and will be good at the job, particularly in telling ministers the realities of what can be achieved.

He says: 'I would say that is one of his great strengths. He knows the system and how to use it.

'The biggest challenge by far is around managing the plan's expectations and matching this to the financial realities. Also he clearly needs to address the accumulated deficits and the liquidity issue. '

Dudley HA finance director Bob Dredge says Mr Douglas will 'command the respect of the service', but that 'he is walking into a bear pit' of problems to be tackled.

Healthcare Financial Management Association chair Mark Millar picks up this point: 'His big challenge is going to be organising the implementation of the NHS plan, but he has a sense of realism and he enjoys the confidence of the system. '

County Durham HA finance director John Flook says: 'He did an excellent job when he was Colin's deputy and demonstrated he had a very good understanding of issues that were being addressed in trusts and health authorities, as well as the ability to tackle some very complex problems. '

In terms of standing up to ministers and pointing out the financial difficulties the service is facing, Mr Flook says his appointment is 'absolutely critical at this time'.

University College London Hospitals trust director of finance Helen Chalmers says Mr Douglas will have 'a very huge task walking into this'.

However, she says the most complex time is the beginning of the financial year, which Mr Douglas will avoid by starting on 1 May.

Quids in: Richard Douglas's career

March 1999 to date: finance director, National Savings.

March 1996-February 1999: deputy director of finance and performance, NHS Executive.

April 1994-March 1996: director of financial audit, National Audit Office.

October 1992-March 1994: associate director of agriculture, NAO.

1990-1992: head of financial planning and monitoring, NHS Executive.

1979-1990: Exchequer and Audit Department, NAO.