Finance bridging the gap between health and local government


By Dr Eleanor Roy, Policy Manager Health & Social Care, CIPFA and Emma Knowles, Director of Policy and Research, HFMA.

Rising demand for high quality health and social care services mean that both sectors are facing challenging times, as funds must stretch further than ever before as almost 10 years of austerity takes effect.  Within this perfect storm, the impetus for change is greater now than ever – and integration must be a major component of the solution.

The new NHS long-term plan has re-emphasised the government’s commitment to the integration agenda – stating that there should be ‘ICSs everywhere’ by 2020. It seems integration is the path and there is no turning back. While it will not magically transform patient care nor create a financially sustainable future in itself – integration does mean taking a more place-based approach, improving outcomes for patients through rethinking service design and delivery. How resources can be best deployed to achieve this, regardless of which ‘pot’ the funds originate from.

Many of the identified barriers to integration relate to the mechanics of two disparate systems coming together – particularly in relation to finance and governance. CIPFA and the HFMA have been working in collaboration to try to break down some of these barriers and promote a shared understanding, particularly to help finance professionals develop open and transparent partnerships with colleagues across organisations and sectors.

The greatest success will come about when everyone has a shared understanding of what is being discussed and what needs to be achieved. To this end CIPFA and the HFMA have already published a joint Glossary for NHS and local government finance and governance as a first step in aiding understanding across organisational boundaries.

As the integration agenda has progressed, some areas have sought to make joint appointments at a senior level, across the health and local government boundary.  Such joint appointments can aid in aligning organisational arrangements and present a whole system approach.  With the need to focus on the ‘place-based pound’ and ensure best use of scarce resources, it makes sense that some of these joint appointments relate to the critical role of the chief finance officer (CFO).  This is the position responsible for holding the financial reins of the organisation, ensuring resources are used wisely to secure positive results.

The roles of the CFO in the NHS and local government are set out in guidance published by the HFMA and CIPFA respectively. The new joint publication Guidance for CFOs working across health and local government aims to consider the implications for the increasing number of CFOs working in a dual arrangement, considering the similarities and differences between the roles in each sector.  The guidance is intended to be useful for:

  • Those in these posts to assess their development needs;
  • Those considering applying for a joint role;
  • Chief executive officers when appointing to these roles and assessing performance once their CFO is in post; and
  • Board members, governors, councillors and executive colleagues to gain a deeper understanding of the role of their CFO and the challenges they face and to understand the impact of any integration plans on the role of the CFO.

With the key being to get best value for the public pound – regardless of which organisation’s budget it came from – CFOs working across the boundary need to be driven by, and support, what is good for the whole health and care system in their local area. The finance role is critical if the opportunities of integration are to be realised in terms of transformed working and better financial control across the system as a whole. There are additional complexities for these CFOs, which is reflected in the skills and knowledge required. But the potential to deliver real improvements for local populations is significant.

Both CIPFA and the HFMA remain committed to supporting these finance leaders and those aspiring to such roles.

This article first appeared in Public Finance Magazine.

CIPFA Thinks

0 KB

Download now

Webchat is available Monday to Friday, 09:00 - 17:00 (excluding UK bank holidays).