NHS Improvement tells trusts not to hide financial risks

Concerns around financial reporting were revealed in a question and answer document issued by NHS Improvement yesterday, which followed a series of meetings with trust chief executives and chairs last month.

According to the Q&A document, the leaders of one trust asked the regulator: “We are being encouraged by our NHS Improvement regional team to report our finances as being on track in Q2 when we’re not. They’re saying lay a breadcrumb trail in the commentary but keep the figures as being on plan. What do you want us to do?”

And a separate question, which appears to have come from a different trust, asked: “We’re clearly behind our 16/17 control total but we’re coming under a lot of pressure from NHS Improvement regional teams to not reveal this. What do you want us to do?”

In its response, NHSI said “in no circumstance should financial problems or risks be hidden”, and told trust leaders to report issues to its senior leadership team.

At the Healthcare Financial Management Association conference today, NHS Improvement chief executive Jim Mackey revealed that he had personally requested those questions be asked and included in the Q&A document.

The regulator had previously stressed the importance of giving confidence to the government at the mid-year point of 2016-17, in relation to the sector’s attempted financial recovery.

HSJ has today revealed several examples of trusts that were listed as being on track with their financial plans midway through 2016-17, despite having produced internal forecasts suggesting significant deterioration. This was due to a new protocol for revising financial forecasts, and there is no suggestion that these were the trusts that raised concerns in the meetings with NHSI.

The regulator’s response to the questions, sent to providers and posted on its website this week, said: “There are times when we need to have difficult discussions with colleagues in providers - this is inevitable in the current context where we are attempting transformation and change in a challenging context.

“However, NHS Improvement needs to be better at ensuring that these are constructive discussions – i.e. discussions that address the challenges head-on and don’t just kick the ball down the road.

“And when this is not the way a conversation goes, we – i.e. the senior leadership team – need to know about it from you so that we can fix it.

“It is part of NHS Improvement’s role to help providers manage their risk effectively, but we cannot do that without a full understanding of the options that might be available in a given system – so we need providers to come to us having considered these options, which may not be obvious and may not be without difficulty…

“In no circumstance should financial problems or risks be hidden. Neither should we assume that they are manageable.”

In February, HSJ revealed how an anonymous finance director had written to a parliamentary committee to warn that trusts were under pressure to “cook the books”.