Daily Insight: Board gets its expectation management in early

Trusts, integrated care systems and NHS England are banking on some fairly optimistic assumptions about finances in the current year: Low covid, low inflation, low staff absence. So it’s notable that board members at one trust are already sounding the alarm.

University Hospitals of Derby and Burton lacks “grip and control” over spending, the trust’s own finance committee said, looking at the first four months of the financial year. They warn that the trust’s deficit – already twice as big as initially planned for – “continues to worsen” due to a rising pay bill and shortfalls on efficiency savings.

In NHS-speak, the committee said it was “not assured” – ie unconvinced – that the trust would break even, which brings with it the prospect of sanctions from NHS head office. The trust’s deputy CEO and chief finance officer admitted the outlook was “naturally challenging” for trusts but stressed that it would bring spending back under control and hit its targets by the end of the year.

The stark assessment from UHDB’s board members is one of the first in the current financial year, and with two in three ICSs already falling behind their financial plans, is unlikely to be the last.

More scrutiny on spending

London will be required to have any clinical and non-clinical spending over £10m approved by the Cabinet Office, with other regions to follow over the next two years.

According to documents seen by HSJ, the new control regime will apply to NHS and foundation trusts, shared procurement services and procurement hubs, and subsidiaries where the majority shareholder is a trust. 

The new rules will also apply to spending in areas that have pre-existing spending control processes, such as digital and IT, and capital procurements over £5m that require NHSE and the Department of Health and Social Care approval.

Integrated care systems are not covered by the new rules, however, though they “will be engaged as part of this process to ensure they understand the new requirements and the impact on NHS trusts”, according to the guidance.

NHSE estimate the new rules will result in the Cabinet Office reviewing 1,200 NHS business cases each year when the system is fully rolled out.

NHSE guidance says only “the most high value and contentious cases will be subject to spend controls”. 

See also our supporting story, Explained: how the Cabinet Office will control trust spending.