Feature / Liverpool’s new dawn

07 March 2022 Seamus Ward

Login to access this content

The impact of Covid on the NHS is well rehearsed, but its effects on NHS finance are not widely known. With a temporary finance regime in place, some processes wound down.Liverpool_shutterstock_1429384751_landscape

In the first lockdown, many finance managers focused on procuring personal protective equipment. Most worked from home, though others took to the front line to help out their clinical and operational colleagues in whatever way they could.

But despite the unprecedented time, relatively normal events took place, such as in Liverpool, where the two biggest providers had recently merged to form Liverpool University Hospitals NHS Foundation Trust (LUFT).

Aintree University Hospital NHS Foundation Trust and the Royal Liverpool and Broadgreen University Hospitals NHS Trust merged in October 2019 to form the new trust. Soon after, the body launched an overhaul of its financial governance.

As well as merging two ledgers, it rebooted its standing financial instructions (SFIs), budgeting, and business case processes, and revitalised its finance training for colleagues in the wider trust. The measures set the foundations for winning three categories in last year’s HFMA Awards – Finance Team of the Year, the Governance Award, and the Havelock Training Award.

The trust’s finance team is led by Rob Forster (pictured), deputy chief executive and chief finance officer. He joined the trust in April 2020, six months after the merger – just as the first wave of Covid was kicking in.Rob Forster_portrait

The merger was clinically led, but Mr Forster says that even though the organisations had been brought together, there was a wide acceptance in the new trust that there was much more to do to make it a success.

In finance, this meant bringing together the ledgers, and establishing a new single financial governance process.

Work had barely started when Covid ‘came along and changed the world’, Mr Forster says. ‘But our role in finance was to continue our work in spite of Covid, so that when we came out of the pandemic we would be in a better position. We would be working in an organisation that had moved from two ledgers to one, for example.’


Revising the rulebook

SFIs were revised with help from internal and external auditors, and benchmarked against other major providers. The finished product is simpler and clearer, enabling quicker decision-making and resource allocation, and is presented in a user-friendly guide to help budget-holders.

‘We had to identify our governance structures and in doing that took the opportunity to change the way we in finance were viewed within the organisation, using it as a catalyst for change,’ says Mr Forster.

‘Anyone who works in finance will know that SFIs are our rule book. They are how we govern our finances. However, not everyone outside finance knows this, so we wanted to remind everyone what the rules and mechanisms are.’

In revising the budget process, Mr Forster says the trust worked with clinical and operational colleagues, devolving as much of its resource to the front line as possible. ‘We are working with colleagues to build budgets, and they can see they are having an influence on the way we control our finances.

‘SFIs are our rule book, but we look at them in conjunction with our business case process and it helps, most importantly, our budget-setting process. In doing that, we can explain that the finances are finite, but, as is often said, it’s not the finance department that spends most of the money, it is clinicians.

‘Our role is to help colleagues as part of (not separate to) the team, and make sure it is spent efficiently and effectively.’

The business case process was redesigned. ‘If the SFIs set the rules, and the budget-setting says how you intend to spend it, the business case process is for when there is something outside of what you expected – how do you go about getting that assessed and approved?’ he says. The new process facilitated controlled prioritisation of additional spending in-year, helping the trust deliver a small surplus in its first operating year.

He adds that the finance department wanted to bust the myth that finance was its domain alone. Finance managers spoke to departments about the allocation of responsibilities, and the rules that would accompany greater devolution.

‘If you are going to commit to this, people recognise that you do need rules. SFIs should be understood and simple to use in a straightforward process. The business case process should be efficient and effective. Overall, we hope it’s started to build the concept of Team LUFT, and to set us up for success as we step out of the pandemic.’

Mr Forster understands why some staff can be wary of the budgeting process, but adds: ‘I get excited by it. It’s a fantastic opportunity to understand your business, no matter which part of it you operate in.

‘It’s the one time of the year that you get to understand what you spent last year and what you expect to spend in the future. Not everyone has that excitement, so we need to explain why we are doing budgets.’


Clinical engagement

Clinical-financial engagement is often tricky, so how was it achieved in a pandemic? The support of senior clinicians was key, he says. ‘Engaging with clinicians was difficult in the pandemic because everyone’s mindset, rightly, was on providing care to the patients we serve. Having said that, I think the clinicians and leaders in this organisation realised we had to get ourselves organised so that when we came out of the pandemic we’d be in a good position. We had to be flexible.’

Being flexible also meant working remotely and communicating through Microsoft Teams – a shift in working practice exemplified by the finance team, says Mr Forster. ‘The finance team did exceptionally well and got straight into it, preparing the information that the clinicians needed.’

The trust’s medical equipment committee, for example, which includes the medical director and deputy medical director, used the new governance processes and the information produced remotely by the finance team, to prioritise spending decisions, and match requirements with the trust’s available resources.

Traditionally, a newly merged trust might choose one of its predecessor’s SFIs, budgeting and business case processes. So why did Liverpool decide to take the seemingly more difficult route of giving the new organisation fresh financial governance policies?

‘This was especially important as it was a merger not a takeover,’ Mr Forster says. ‘I also had this image of coming in afresh, with a fresh set of policies. We didn’t want to miss the opportunity to create something that was of value to us and others in the NHS.’

The trust is happy to share its experiences and new financial governance measures with colleagues around the NHS.

‘The catalyst for this was the merger and the arrival of a new CFO, but it doesn’t need to be,’ Mr Forster says. ‘A review of governance can be a real spark for change for any organisation – and you can change the perception of finance along the way.’


Key principles
To overhaul its budgeting process, the finance team worked with non-finance colleagues. Together, they set out four factors for implementing change:
  • Factual – Changes should be based on reliable information that is accurate and meaningful throughout the organisation
  • Transparent – The trust held check and challenge sessions at each stage of the budgeting process, to scrutinise how decisions were made, the cost of the policy, and cost improvements involved. This helped clinical, operational and finance staff to buy into proposals
  • Open and inclusive – Mr Forster says the finance team wanted to ensure all relevant staff received the information they needed to support decision-making. It could not be a case of finance making decisions and then telling others what would happen, he adds. Progress should be reported regularly
  • Realistic – ‘We had to reflect on what could be achieved in the resources available,’ Mr Forster says.
Game changer
 liverpool.appA novel game app helped win the trust one of its three HFMA awards in 2021. The app aims to bring finance and non-finance communities together to make the year-end accounting process less of a niche activity.

Mr Forster says the app is an important element in its development of finance for non-finance staff. It had developed its training for non-finance managers, tapping into the local John Moores University MBA schemes, and Mr Forster hosts his own podcast, The balance. But the team wanted to innovate further.

He says: ‘It’s one thing working with colleagues to develop a set of rules and policies, but the app is recognition that in the organisation we have over 13,000 whole-time equivalent staff, and we need to take seriously our responsibility to help non-finance people deal with finance.’

Supporting documents
24-25_mar22_LIVERPOOL final