Feature / Automatic for the finance people

People are attracted to accountancy and working in NHS finance for lots of reasons. But it is fair to say that filling in regular finance returns and submitting them to the centre is not one of them.

NHS providers’ provider finance returns (PFRs) may be essential if NHS England is to see how providers are performing against financial plans and to highlight where pressures are emerging – on staffing, for example. But they take considerable time to complete – time that could be better spent on analysis or supporting budget holders and clinical teams to add value to patient care. They are also vulnerable to human error – a lot of damage can be done with a simple cut and paste.

The Becoming One NHS Finance report, the output of a conversation with the NHS finance community commissioned by the Finance Leadership Council, made it clear. Finance staff wanted greater use of automation, leaving them with more time to analyse figures and use the data to drive improvement. The PFRs seemed a good place to start.

So this year, the One NHS Finance Finance Innovation Forum has been working with NHS England’s returns team to see if this manual burden can be reduced with a simple and shareable Excel-based automated solution.

Edd Berry, director of finance innovation at Manchester University Hospitals NHS Trust and a member of the Finance Innovation Forum, says completing the returns can be a big burden, particularly when there are changes to the template and the data requested each month. For example, this year NHS England has added requests for information about providers’ utility costs. The returns resemble a mini set of accounts including details of income, balance sheet and cash flow, with lots of additional detail required on aspects such as staffing and staffing costs.

They are typically made available by working day 1 of each month, with trusts having to make partial submission for their system on working day 6, based on a minimum data set. Then the full submission to NHS England is on working day 11. Some 25 tabs in the workbook require some degree of input – ranging from a few cells to hundreds of elements needing to be completed.

‘In a big organisation, there will be a team of people involved in compiling the information. But in a smaller trust, it could be one person doing the whole return,’ says Mr Berry.

Half a dozen people are involved for a few days each month in the Manchester trust, he says. The spreadsheets have been aligned with the planning template, so the monthly returns feel familiar, but it’s still a lot of work, even when the details being requested haven’t changed.

Different requirements

All organisations run different ledgers, which are set up to meet their local needs. For example, a ledger may be programmed to provide data at the level of detail that the board wants to see it, which may be a slightly different view than that required by NHS England.

A trust might identify all its nursing and midwifery costs by agenda for change bands, while NHS England only wants to see the costs split into substantive, bank and agency. Some ledgers may be able to provide this output, others would require a manual intervention.

Once the month-specific workbook is issued, a trust would typically need to convert it into a shared file to enable multiple people to access and work on it at the same time. It is pre-populated with a trust’s planned figures and with numbers from previous returns; trusts then input their actual year-to-date figures and their full-year forecasts.

There are multiple worksheets. For example, one looks at staff cost detail. ‘What you would normally do is pull off a trial balance from the ledger and it would hopefully be summarised at the NHS England category level correctly,’ says Mr Berry. ‘That can take some checking, especially if someone has created new codes and there is misalignment with the required categories. Then, basically, it is just a case of typing all those figures directly into the return, line by line.’

The problem is that the sheets can be huge. ‘It’s not a difficult process,’ comments Mr Berry, ‘it’s just time-consuming – and there is a lot of scope for manual error and putting figures in the wrong boxes.’

The main benefit of automation, he says, is the time it can save. His trust switched to working day 1 reporting a couple of years ago. The thinking is that the sooner you know your position, the sooner you can do something about it. And, in a similar way, reducing the time spent on transactional processes, such as those involved with filling in the PFRs, frees up people to analyse the data and make decisions.

Rather than taking time to compile data for the centre showing, for example, a big variation against plan, finance staff could be spending their time understanding why there is the variation and putting mitigating actions in place. ‘Anything that puts more time back into locally supporting the decision-making is a good thing,’ says Mr Berry. ‘Feeding the central beast is an essential part of what we do, but we need to do it as efficiently as possible.’

He recognises that some people are nervous about automation, in case they lose control of the numbers being reported. But he believes this is born of a misunderstanding of how automation works. ‘You are actually making the system far more reliable,’ he says. ‘You design and build it and then thoroughly test it until you have an automated process that will always do exactly the same thing. It won’t get disturbed when someone interrupts you and it will eliminate human errors.’

The automation process works on the basis of describing a standardised data set in the same way that data sets are produced for outpatient or accident and emergency activity. The idea is that all organisations can set up their ledger systems to output data in a set order. Depending on the ledger, it may be able to output data at the NHS England category summarised level or the trust may need to do a little local mapping.

This list would have three columns – subcode, main code and value – with the codes making it clear that this was, for example, the year-to-date costs for substantive registered nurses. With a list output in this format, all the trust finance manager has to do is cut and paste the long, three-column list into the provided spreadsheet tool and the tool then populates the rest of the workbook.

Use of the tool is completely voluntary. And while it does involve some initial set-up work with the ledger, that only needs to be done once. And trusts don’t need to codify everything straightaway. They might start just with the income and expenditure and continue to do the balance sheet and cash manually. Or they might just start with staffing costs and then gradually improve their automation.

Steve Hubbard, deputy director of financial reporting at NHS England, says trusts do need to put a small amount of time into the tool up front. ‘It will take perhaps four to five hours to set up,’ he says. ‘You have to invest that time. But then you have something that will save time on a monthly basis.’ Feedback from NHS providers suggests that the tool is saving as much as five hours work each month.

But it has other benefits. Some trusts have reported that using the tool has prompted a wider review of the efficiency of their reporting processes. ‘It can make everyone’s process leaner,’ says Mr Hubbard. ‘And that can open up other doors.’

Claire Ridgway, senior financial reporting lead at NHS England, says there is a small increased admin burden for the central team. But this is minor compared with the benefit, even for an individual trust, and is incurred just once, rather than in every NHS provider finance team. She adds that the tool was designed by practitioners in frontline finance teams and then built by NHS England.

The tool did not start from scratch, but drew on existing local solutions already in use across a wide-ranging user group. However, she says that some local automation solutions still resulted in an Excel spreadsheet with data that needed to be copied over to the formal returns. The new tool takes the automation a step further.

Take-up rate

Up to 20% of NHS providers have started to use the tool to some extent and NHS England is keen to encourage other organisations to follow. It insists the sole motivation is to reduce the burden on finance practitioners. ‘We’ve built the tool, but it has been designed by the service. In particular, it should help smaller providers to make their process more efficient and to free up their time,’ says Ms Ridgway.

Mr Hubbard adds that the whole returns team has worked in frontline finance roles and has experience of the returns process. ‘There is some benefit to NHS England,’ he admits. ‘If we’ve created more time for trust finance teams, the product we receive should have fewer queries or problems,’ he says.

Back in Manchester, Mr Berry agrees that reducing the burden of form-filling should allow more time for checking figures before submissions. In the manual process, about 80% of the time is taken up actually filling in the return, he says, leaving just 20% of the time for checking. Automation should flip those numbers on their head.

‘The point is that it is an automated filling-in process, not an automated submission,’ says Mr Berry. ‘It doesn’t submit the information without you looking at it first. So, you can look for any variations or surprise changes.’

There is a clear direction of travel towards earlier financial reporting. Several organisations have moved towards adopting working day 1 reporting and more are showing interest. A recent One NHS Finance webinar on the topic attracted more than 150 delegates. It also seems likely that system working and reporting will push organisations to harmonise their reporting practices across systems. Systems are unlikely to want some organisations reporting the most recent month’s figures while others are quoting the previous month or have reporting dictated by the slowest in the system.

Automating the PFR process clearly aligns with this move to faster reporting. But there are no current plans to bring the PFR timetable forward. For Mr Berry, the automation tool is a no-brainer. ‘People manually typing in figures, and potentially not getting it right, is not adding value,’ he says. ‘The bit that adds value is the analysis of what the figures are saying.’

And the tool frees up finance managers up to do exactly that.