What's on managers' minds this week

Published: 22/04/2002, Volume II4, No. 5902 Page 12

Here is the conundrum. Currently the NHS is in the midst of a cash windfall. Billions of pounds of taxpayers'money is showering down on a service that, compared with European averages, has often looked like a desert of public investment.Yet speak to any finance director and you will hear tales of trusts struggling to find the money to balance their books.

Some of the anguish can be put down to the perennial battle to squeeze money from the system to deal with the inevitable end-of-year financial cracks. But not all.

According to one south west financial manager, the situation is clear:

'From a financial perspective, It is pretty obvious there are still these problems.You have got a lot of money in the system, but the NHS has currently got its foot to the floor. There are the access targets to hit, there is the expansion of service capacity, the increases in staff numbers. There is the political pressure to push the NHS as far as possible.

The government wants results. And the fact is that doing all that costs money.'

Even within an NHS on intimate terms with the concept of structural upheaval, the challenges are particularly acute. Three stand out:

the unholy trinity of the GP and consultant contracts, Agenda for Change and payment by results.

Department of Health human resources director Andrew Foster has described Agenda for Change as 10 times bigger than the consultant contract.And there have been suggestions that a tiny miscalculation in the funding calculations could have a massive effect on NHS finances.

A Midlands acute trust finance director says: 'It is simply the scale of the challenge. Look at the consultant contract and you are dealing with, say, 40,000 people. Agenda for Change is going to affect a million or so staff. The problem is that many finance directors are firefighting at the moment - concentrating on the consultant contract, on reaching financial balance and the rest. Agenda for Change, if we only reach agreement with the unions late in the year, is going to rise up and bite people on the arse.'

There is an argument that with the government's new-found enthusiasm for localism, senior officials in the DoH have become deaf to the concerns in the NHS. The saga over the consultant contract - with officials describing funding shortfalls that didn't fit the reality individual trust managers were dealing with - has done nothing but reinforce that perception.

'I think the central message they get from the NHS comes through the strategic health authorities, ' says one primary care trust finance director. 'They are like the new regions [regional executives]. That is OK as far as it goes, but they are responsible for performance management and that ties them to giving the centre the information that it wants to hear - that things are rosy. It is only a partial picture.'

Not all are sympathetic, however. An acute trust finance manger said:

'Part of this is about the need for the NHS to be mothered. Any time there is a problem, the automatic reaction is to look to the DoH to come and sort stuff out. But the system is no longer like that. Power and money have been devolved. The PCTs should be calling the shots and It is the PCTs where questions should be asked.'

The full-fat version of payment by results, when it covers the vast proportion of provider trusts' income, is probably still a couple of years away. But it remains the hot topic within the finance community.

As the Midlands manager says: 'It is not the right way to go about it but many trusts are still thinking It is early days. The importance of the policy has now registered with finance staff. But you speak to senior clinicians and It is something they are aware of, but it is something that will wait till later. If [payment by results] is going to work then - the simple fact is it can't.'