Speaking of finances
I have just had to return my latest set of accounts / projections to my accountant. They go into detail of my current trading position & the fact that FrontPoint Towers could do with a little more in the way of footfall. I run a deferred gratification accounting system i.e I spend the money when my clients actually get around to paying me. And my accountant would not be amused if I told him that I was going to use the money set aside for his fees to plump up the business so that the Director (yours truly) could claim a bonus / congratulate myself on a job well done & move on.
The third quarter report for the 2006-07 financial year is in & makes waves in all the outlets.
The NHS has slipped even deeper into debt over the last three months with the total deficit reaching £1.318 billion, over £150 million more than predicted in the second quarter. 35 per cent of NHS organisations are forecasting deficits for this year compared with 33 per cent last quarter.
So how do you balance the books in an organisation facing this kind of business environment?
Well, it is done by forcing Strategic Health Authorities to topslice 3 per cent of the budgets of the best performing trusts into a contingency fund that counts against the total deficit.
In addition £450 million has been found by slashing the amount spent on training NHS staff.
Other strategies include:
Trusts are delaying payments to creditors.
PCT’s are refusing to pay for services beyond a minimum.
Patients are being asked to wait longer for treatment.
GP’s on PMS contracts are being forcibly moved onto GMS.
The cuts in services available to patients have been covered elsewhere.
Referral Management centres are springing up like a rash with little or no evidence behind them.
There has been no training / education funding worth the name for the past year.
I quote Norman Lamb, the Liberal Democrat health spokesman:
Deficit-ridden trusts are paying a heavy price for the Government’s political priorities. There is little cause for celebration in these figures.
Scores of trusts are under immense pressure to clear historic deficits, and are forced to make cuts in so called ’soft target’ services.
The Government is employing all sorts of tricks by shifting debts from one organisation to another.
These accounting rules would make Del Boy proud but won’t make the problem disappear.
I would have to concur. Just what is being achieved by the NHS meeting this artificial deadline in such a disingenuous way at immense cost to the long term effectiveness of the service?
References:
Just where did these deficits come from?
Causes of Deficits (paraphrased):
• Increased numbers of staff employed in the NHS in response to previous targets.
• Resource allocation – Primarily due to increased expenditure rather than reduction in income. The persistence of deficits beyond 2004/5 to the present may however be aggravated by movement to allocation targets.
• Cost pressures – Spending more on staff costs while spending less on pharma meant not much of a factor.
• Performance targets – Areas that spent more to achieve targets have larger deficits.
• Changes in accounting practices – RAB in addition to loss of £200- £300 million of local virement flexibility have contributed to the emergence of aggregate deficits in 2004/05, and together with performance targets, may well help explain the uneven geographical distribution.
• Organisations with large deficits are frequently found to have had weak management capacity. However, geographic and age-needs patterns of deficits are not easily explained by management alone. Management skills may interact with economic drivers, so that in areas experiencing adverse economic circumstances good management may moderate the consequences, but weak management may exacerbate the underlying causes and result in large deficits. So some PCT’s did not need turnaround teams, thank you.
The Government’s Response to the Health Select Committee’s Report on NHS Deficits: So what does the govt do?
RAB is not going away.
ACRA to report later this year re funding formula.
Still tinkering with PbR.
February 25th, 2007 at 10:40 am
[...] that the 3rd quarter deficit figures are in & there is no immediate threat of resignation, lets look at this again, shall [...]
February 28th, 2007 at 8:54 am
[...] then there have been other priorities which is why pretty much all funding for training has been cancelled, including for life-support courses, let alone communication [...]