Published: 27/05/2004, Volume II4, No. 5907 Page 18

do not be fooled by the word 'introductory'- the seventh edition of this finance guide is complicated but essential reading, says Paul Smith

NHS Finance in the UK Introductory guide Publisher: Healthcare Financial Management Association. ISBN: 1904624073.£27

There is an expression that often forms on a person's face when talking NHS finance. It is what is known as the Forrest Gump stare. I first saw it when I was sitting on the press bench during a Commons health select committee hearing last November.

It was the turn of Department of Health finance director Richard Douglas to be grilled by MPs.Half way through he was asked why so many trusts were reporting deficits despite ministers' suggestion that there was no need to worry because the NHS was in surplus.

Mr Douglas embarked on an analysis of 'year-on-year breakeven duties', 'yearly forecast positions', 'planned positions' and the importance of 'outturns'.Within seconds the stare slowly spread round the committee room - me included.

The subject was politely switched to more familiar matters following a vague promise by one of the MPs to 'probe Mr Douglas's boss' - one Sir Nigel Crisp - on the issue during his appearance before the committee a week later.

And yet a little more probing then and there could have led MPs to discover something important. As last month's Audit Commission report on NHS financial management highlighted, behind the overall surplus enjoyed by the NHS a sizeable number of trusts clearly had difficulty living within their means. Fifty-one were reported to have made 'significant deficits' in 2002-03 - up from 31 the previous year.

This is one reason why the NHS Finance in the UK, published by the Healthcare Financial Management Association, should be required reading. Now in its seventh edition, the book is an attempt to demystify the science - and art - of financial management, the issue whose shadow falls on virtually every debate about the NHS.

The irony is that the government's professed aim to make transparent the use to which the NHS puts taxpayers' billions might have made a tome of this type superfluous to needs.

Take payment by results and programme budgeting, for example. And the way in which the brokerage system - historically used to fill discreetly the financial holes in trusts' year-end accounts - is run centrally through the NHS Bank. The message to those on the inside is that if your organisation starts to unravel, we will know about it.

But in reality the commitment to transparency does not always extend to the public arena where academics, journalists, politicians - and, importantly, non-executive directors - often have to fight to get any idea of what is really going on.

Consider last year's row about whether the pledged increases in mental health funding were being honoured. The DoH has carried out a financial audit, it knows from its own assessments whether the claims are true; it would be nice if the rest of us were let in on the secret. The attitude fosters a fake openness where the hard choices facing a finitely funded NHS are rarely acknowledged.

Although NHS Finance in the UK is sold as an 'introductory' guide, do not confuse that with the word 'simple'. The book does not shy away from dealing with the arcane intricacies of NHS accounting. There are three pages on the external financing limit and the capital absorption duty.

But it does bring the reader up to date on the big issues in a relatively clear and concise fashion. Payment by results obviously sits a little larger in the text than it did in the previous edition. There is an outline of the complexities of commissioning and the financial rationale for foundation trusts. And it gives a detailed account of the broader aims of current policy.

In the main it does not attempt to offer judgements on the merits of what the government is doing - the HFMA is a management organisation, after all. But given this, it appears odd that the discussion on the private finance initiative lists six reasons why it is a good thing.

Even the policy's most entrenched zealot would recognise that there is an alternative view which for sake of balance might have been worth mentioning.

Whether reading this book is a cure for the Forrest Gump stare remains to be seen. But it does mean there is less excuse for it.