NHS finances prove need for sound financial management
Sometimes I wonder whether accountancy matters – a strange admission for the author of a blog that labours under that very title. I imagine I'm not alone in that. Accountancy is used by many as a yardstick for all that's dull (see here and here) – and more recently, and more damagingly, has been used as shorthand to describe a group who stamp out creativity and endeavour (see my previous comments here and here on that one).
Similarly few of the thousands of accountants interviewed over the years have said that they always wanted to be an accountant; most fell into the profession.
And then some days, like yesterday, it becomes clear why it does matter. In a report that painted a pretty poor (but improving) picture of NHS finances, the Audit Commission said nearly one in three NHS bodies were still in the red.
The 2006/07 review found 31% of NHS trusts and primary care showed 'inadequate performance' – though this was better than last year's 39%. Perhaps the headline improvement was that despite a deficit of £547m in 2005/06, the NHS made a small surplus of £515m in 2006/07.
It was comments from Steve Bundred, chief executive of the Audit Commission and a former local government finance director, that hammered home to me why accountancy does indeed matter.
'A number of NHS bodies are failing to manage their finances adequately and there appears little hope that they can get out of trouble by themselves,' he said.
'Managing money well goes hand-in-hand with providing better patient care. Trusts that fail to manage their money well are unlikely to be doing their best for patients.'
You can apply that to other sectors and other industries.
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