Magazine article Public Finance

Value Via Sharing

Magazine article Public Finance

Value Via Sharing

Article excerpt

Perhaps more than any other public service, the NHS is changing how it works as pressures on services and finances increase.

From working with local government on integrated social care to pilot projects to test new models of delivery in hospitals, the world's fifth biggest organisation is trying to reform itself while keeping life-saving services going.

Even since May's general election, the pace of change seems to have increased in an effort to deliver the £22bn efficiency savings required by 2020 under NHS England's Five Year Forward View. Spending on agency staff has been limited, new contracts for doctors proposed and a government-backed efficiency review by Labour peer Lord Carter found £5bn could potentially be saved from procurement and staffing costs.

One organisation that is key to unlocking these efficiencies is NHS Shared Business Services, the government-backed joint venture with technology firm Sopra Steria, set up to enable services to integrate.

In September, the organisation appointed Stephen Sutcliffe, a CIPFA member who has held a number of senior finance jobs in the health service, to lead its finance and accounting division. In this post, Sutcliffe will lead the organisation's use of both shared services and business intelligence in the NHS.

Speaking to Public Finance as he settles into his new role, Sutcliffe acknowledges there is "a huge challenge" ahead.

"What the NHS is battling with is that it can't continue to make the savings in the way that it has done historically," he says.

"No savings are easy, but there was low-hanging fruit, the ones that are more obvious, but it is time for a transformational approach. I think the vanguard new models of care and the work around health and social care integration are all about that - using taxpayers' money to provide the best value possible."

Although shared services are not new in the NHS, Sutcliffe tells PF that the Carter review, which endorsed the use of shared services for back and mid-office functions, means this approach can be built upon.

Currently, NHS SBS works with all NHS commissioning organisations and around 50% of NHS provider trusts, standardising accounts payable and receivable, cash and treasury management, and debt management.

It has a target to achieve £1bn of cost savings in the NHS through this work, having achieved its original 10-year target of £224m in 2014.

NHS providers - which registered a whopping £930m deficit in the first three months of 2015/16 - are a key area where savings, estimated to provide a 20% to 30% reduction on in-house costs, can be made through shared services.

"It's there where there is possible opportunity to deliver shared services," Sutcliffe says. "I think that for clinical commissioning groups, being a bit smaller, the economic argument is very compelling. The challenge in the past has probably been the size of providers - the big hospitals are large enough to feel that they can have the economies of scale by themselves or just deliver a good service themselves. It is about demonstrating the value of the technology as well as the service provided."

Alongside seeking to unlock these savings, Sutcliffe highlights how shared services can help create an organisational mindset for collaboration - such as between health and social care - and adopting best practice.

"My experience, when I was a client of a shared service, was that it challenged us internally to raise our game. …

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