Technical review - March 2021

The government has revoked a recently introduced rule that capped public sector exit payments at £95,000. NHS Employers said the decision was taken due to the unintended consequences the rule may have had on some employees. Redundancy payments will revert to the terms and conditions set out in the individual’s employment contract or relevant scheme.

NHS England and NHS Improvement are consulting on new rules for procuring NHS healthcare services. The proposed NHS provider selection regime would remove the procurement rules stemming from the Health and Social Care Act 2012 and public contract regulations. Instead, organisations would use five criteria to identify the most suitable provider or run a competitive tender. The proposals allow for the continuation of existing arrangements, selecting the most suitable provider when a service is new or changed, and running competitive tenders.

A new briefing from the HFMA examines current issues that mean NHS bodies are finding it difficult to appoint an external auditor. Informed by a survey of NHS finance directors, the briefing explores reducing interest in audit contracts among auditors, the increase in audit risks and concerns about auditor capacity. While fundamental change is required to the NHS external audit market, the briefing highlights actions that can be taken now by NHS bodies and the measures that will need to be nationally co-ordinated.

New pay progression arrangements should not be delayed during the Covid pandemic, according to guidance issued by the NHS Staff Council Executive. From 1 April, there will be new pay progression arrangements for staff on Agenda for Change contracts. All pay bands will have one or two step points with specified minimum periods before progression can take place. The new guidance on pay progression covers the steps employers should take to prepare for the new arrangements and to account for the impact of Covid on an individual’s progression.

The quality of the activity data needed for costing is poor in key areas, according to a briefing from the HFMA Healthcare Costing for Value Institute and Grant Thornton. The briefing highlights areas where board members, system leaders and clinicians can support better data, such as ensuring information used for decision-making is subject to assurance and scrutiny.

NHS England updated guidance at the end of January on how to account for the central pension contribution in 2020/21. Following a revaluation of the NHS pension scheme, the employer contribution increased by 6.3% to 20.68% from 1 April 2019. However, under transitional arrangements, the employer contribution was 14.38% in 2019/20, with NHS England and the Department of Health and Social Care contributing the remaining 6.3%. These arrangements remain in place for 2020/21, and the guidance sets out how the employer contribution will be accounted for in full by both commissioners and providers.

The HFMA has published a briefing looking at the head of internal audit annual opinion. The opinion – a requirement of internal audit standards – is produced annually to support an organisation’s annual governance statement. The briefing explains the requirements of the opinion and considers the key issues for 2020/21 opinions and in particular the impact of the Covid-19 pandemic and the NHS response to it.