Magazine article Public Finance

Getting Fit for Finance

Magazine article Public Finance

Getting Fit for Finance

Article excerpt

When the media spotlight falls on NHS finance, it is usually associated with a crisis. The headline might be about the latest turnaround or the need to cut costs. At these times, the NHS finance function will be near the eye of the storm. But to weather the storm - or even prevent it -finance must be match-fit for the challenges of the modern NHS.

The classic model of the finance function is one that deals with transactional processing, budgetary control and reporting the numbers. But this model has been passe for more than a decade. The modern finance function, in both the private and public sectors, is one that spends more time focused on decision-making and adding value.

Research carried out for KPMG by the Economist Intelligence Unit across the globe shows that top-performing organisations have top-performing finance functions.

This begins with a clear strategy and objectives and is supported by robust financial processes, the delivery of high-quality and timely information and the employment of staff who are up for the challenge.

We were interested in understanding how far NHS finance had gone towards 'being the best', and decided to talk to finance directors in a variety of NHS organisations across the country.

We asked them about strategy and goals, processes, information and people. We also looked at how closely they co-operate with the rest of the organisation and what the major barriers to change were.

The good news is that NHS finance departments are ready to change. Finance directors now regard advising other service lines on operational decisions as a priority. And many more are becoming involved in long-term business strategy. This is particularly true in the new foundation trusts.

However, finance directors know there is still a long way to go. Lack of access to good management information, inefficient business processes and poor IT systems are major barriers to change. Others cite the lack of investment in the finance function and difficulties in recruiting and retaining skilled professionals.

More than half say that there should be more co-operation between the finance function and clinical coding, as well as better collaboration with medical staff. Many complain that other departments do not understand the finance function's role.

From our experience, most finance departments still lack a performance culture. NHS finance directors are getting the basics right but lack a clear strategy and vision for the future.

So what needs to be done? …

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