NHS Improvement makes asset sales change

Trusts are encouraged to sell surplus assets. This generates cash for the selling organisation and, with capital tight to address backlog maintenance and support transformation, trusts have been urged to ensure they are identifying assets they no longer need.

Where there is a profit on disposal – selling price minus value of asset recorded in the statement of financial position minus costs of sale – this can increase any operating surplus or reduce a deficit.

In recent years, trusts reporting an improved financial position compared with their set control total have benefited from an increased share of sustainability funding – initially on a pound for pound basis.

There were a number of cases of trusts selling significant assets, which improved their financial position, triggering increased payments from the Sustainability and Transformation Fund (now the Provider Sustainability Fund, or PSF). This in turn triggered a further improvement in financial position.

While trusts were following the correct accounting treatment, NHS Improvement has amended this for 2019/20. ‘Providers will not be able to use any of these gains to deliver their original 2019/20 control total,’ it said in a letter.

The letter from Elizabeth O’Mahony, NHS Improvement’s chief finance officer, notified providers of their control totals, which were described as ‘stretching, deliverable and reflecting the distributional impact of the changes that have been made to the financial architecture of the NHS’. The letter also confirmed that the ability to earn PSF in 2019/20 would be solely linked to acceptance and delivery of control totals. Currently, as long as control totals are met, 30% of PSF funds are linked to A&E performance.

A further letter to providers has added conditions to a specific bonus scheme linked to the PSF. Eligibility will now be partly based on the level of recurrent efficiency schemes delivered.