NHS hospitals are under pressure to paint a healthy picture of their accounts to hide the deficits, or they are under pressure to cook the books and underplay the scale of the deficits.
A guidance issued by the Department of Health (DoH), seen by The Daily Telegraph, urges NHS trusts to adopt measures which will help them to improve the books in the short-term. Financial experts said the advice was a “desperate attempt at creative accounting”. The guidance urges trusts not to be too “prudent” in their approach.
The health service is currently on course to reach a year-end deficit of £2.8bn for 2015/16, compared with debts of £822m the previous year. Such figures raise the prospect that the DoH could be forced to get a bailout from the Treasury, a serious breach of Whitehall protocol, which would be likely to trigger an inquiry by the Public Accounts Committee.
Sally Gainsbury, senior policy analyst at thinktank the Nuffield Trust, was quoted as saying in The Daily Telegraph report: “This guidance puts pressure on finance directors to indulge in the most desperate creative accountancy – to stretch the rules as far as they can possibly go. There is nothing illegal in the DoH advice, but the risk is that this continued pressure pushes financial directors right towards the edge of what they should be doing. They are asking financial directors to pull the wool over the Treasury’s eyes and the public’s eyes – to paint a false picture of the situation the NHS is facing.”
