8 July - Non-executive directors - Financial planning with Jerry Gould

This week’s session opened in conversation with Jerry Gould, Vice Chair University Hospitals Coventry and Warwickshire NHS Trust.

Jerry set out some of the financial planning challenges: “It’s never been easy to plan finances and the current circumstances probably make it harder than ever. This year there are so many uncertainties. It’s not just a large backlog of people on the elective list, but the mix of clinical challenges is also different, so we’re having to ask questions about our theatre rotas, our ward configuration, our medics’ job plans – none of which we really anticipated.

“Other things have changed too. We’ve changed the way we work because of Covid, and in many respects we don't want to go back to the way we worked before. All of this impacts on your financial planning. Add to that staff sickness much higher than expected, high levels of inflation, and the competition for our staff – particularly at the lower grades.

“While we might have a go at forecasting in relation to some of those issues, we’ve also got additional ones now that we have to get a handle on. What will the new ICB decide in respect of allocation of budgets at place level? What about the impact of provider collaboratives? How will individual ICS partners behave? Each will be starting from a different position with different priorities and different approaches.

“Then there’s the transfer of many elements of specialised commissioning to system operations and we don’t yet know what that’s going to be, we don’t know how that’s going to be affected. There will be the loss of economies of scale that need to be accommodated.

“And everything’s now up in the air thanks to what is going on in central government. Who knows what our new secretary of state, our new prime minister, our new chancellor are going to do?

“We’re also running as a system as well as individual organisations, so there’s no point in me saying to our commissioners ‘we’re going to do loads more activity and you’re going to pay us more for doing it’ because all that’s doing is moving money around in a circle within the system and not solving the problem. So that’s fundamentally different too.

“We were talking yesterday about work we’re doing around keeping people out of hospital – making sure they’re able to go home more quickly – and some work we’re doing with our partners in healthcare and the local authority and one of the challenges is how you move money around. While it might be quite easy to move money around within the health service, when you start talking about moving money from a local authority to the health service it gets very difficult. And yet if you look at how we can save resources within the pathways by managing people’s needs better, a lot of the savings will be in the local authority.

“One of the problems with driving people to get their waiting lists down by number is that we may undermine things like looking at inequalities because they’ll just be trying to get the number, on the grounds that you get what you measure.

“The problem we have now is that we don’t really have the resources to deliver what the population expects from the NHS – yes, we can make things more efficient but there’s only so much you can do in that regard.”

Also overheard during the discussion:

“I went to an HFMA audit conference when someone from the DoH effectively said ‘we are making it up as we go along’ whilst at the same time espousing the objective of the whole system (and each individual ICS) being in balance by 2023/24. Since then Covid and its consequences have complicated matters significantly, but it feels as though the centre is still making it up as we go along!”

“I think the NHS financial framework has got a bit out of kilter with the policy direction. This was spotted quite a while ago, but we seem to be finding it quite difficult for the framework to catch up with the rhetoric and now the legislation.”

“From an operational management perspective, one of the things we’re confronting since Covid is that organisations have forgotten how to do things. So the way they would have looked at things in 2018 just isn’t happening. So it’s about trying to get a bit of memory back in as we go through the recovery – don’t forget you’ve got to think about this, this and this. Sometimes it’s difficult to get some of my folk to stop thinking that more activity means building more. We need to get to a focus on cost base, not income generation.”

“I’m concerned about health inequalities being pushed aside by he who shouts loudest – the big university acute hospitals against local DDHs… there will be some populations who are at risk of losing out.”

“I was hoping this year was going to be the big change year, but I think it’s going to end up being more about transition and getting ready, and next year’s going to be the real start. I’ll give you an example of why this is. We’re trying to build three buildings and we can’t get a maximum guaranteed price, we can’t get the steel because the Russians have blown up the steelworks, we can’t get the labour because Brexit and the pandemic means people have gone home and they don’t want to come back again – these are relatively small projects, but we just can’t get them moving.”

These meetings are by invitation and are open to all NHS non-executives directors, chairs and associate non-executive directors of NHS providers. Others may attend by special invitation.

If you have any comments, questions or suggestions about these webinars, please contact: events@good-governance.org.uk