News / Systems set for platform move as ISFE contract extended

01 June 2021 Steve Brown

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The extension provides stability in the transition to integrated care systems, and also buys time to consider the potential of a future solution covering human resources as well as finance. However, while the three-year contract extension – until March 2024 – implies a continuation of the status quo, in fact there is a busy time ahead for the shared services provider.Sutcliffe SBS p

The ISFE was introduced in 2013 to provide a common accounting platform for NHS England and the newly established clinical commissioning groups. The platform – based on Oracle technology – uses a common chart of accounts and means all CCGs account and report in a consistent way. It also streamlines accounts consolidation for NHS England.

Wrapped around the core technology is a range of finance and accounting services. These include processing the 3.3 million invoices submitted each year for CCG payment and overseeing the approval process, collecting debt and the reconciliations and VAT returns.

The contract has been extended once before, in 2018, with the renewal due this year. However, the Covid-19 pandemic has pulled NHS England’s focus to more immediate pressures.

Changing the contract just a year ahead of the demise of clinical commissioning groups and the introduction of statutory integrated care systems could also be regarded as an unnecessary disruption.

There will be no further extension beyond 2024, with a tender for the replacement ISFE system due to go live in July this year.

Stephen Sutcliffe (pictured), director of finance and accounting at NHS SBS, points out that the ISFE is one of the ‘major systems in government’. 

According to the contract extension notice, the extension will cost NHS England just short of £20m a year over the coming three years, and has already cost more than £126m over the eight years to date. ‘Moving to a new provider is a big job involving systems, people and processes,’ Mr Sutcliffe said. ‘NHS England needed to give themselves enough time to go through a procurement process – and a year is probably what you’d expect given the scale of the project – and then the change programme.’

Over the more than 10 years of the contract, NHS SBS says it will have delivered savings of more than £40m in transactional costs alone, with non-financial benefits on top. For example, the delivery of consolidated reporting saves time and ensures stronger control and assurance.

The move to systems means some major changes for the ISFE as 106 CCGs disappear to be replaced by 42 ICSs.

In some ways, NHS SBS is familiar with the process. It has overseen the gradual merger of CCGs from the original 211 down to the current 106 – with 38 CCGs merging into nine new organisations in April this year.

‘We’ve had a lot of success with merging CCGs’ books in recent years and putting them onto one ledger,’ says Mr Sutcliffe.

‘We do that really well, but that doesn’t mean it is easy. It is basically a six-month project to change suppliers, processes and people. So, while in some ways moving from the 106 CCGs to the 42 statutory ICS bodies is just a bigger project – it in fact involves changing all our ISFE customers.

‘What we don’t know yet is what the ICS statutory bodies will actually look like. There is some talk of them having wider responsibilities than CCGs – for example primary care and specialised commissioning responsibilities. So, it could also involve changing scope – and that is one of the added dimensions.’

In addition, a number of fledgling ICSs have been talking more broadly with NHS SBS about working as ICSs, the implications for existing finance systems and the impact on financial reporting.

The technology is also changing. Mr Sutcliffe says the ISFE is already cloud-based – NHS customers were quickly able to access their ledgers and reports after last year’s move en masse to home working as a result of Covid-19.

‘But last year we moved all our Oracle system away from on premise – where our data centre was with Capita – and we moved it all to Oracle cloud infrastructure.

‘So, our current version of Oracle – 12.2 – is in Oracle cloud. And we have a roadmap to move to the next version of Oracle – Oracle Fusion Cloud Financials – and this year we will implement the first stage of that move.’

This is based on more modern technology with a higher level of automation built in, doing away with the need for bolt-on robotic processes, and offers an improved user interface and enhanced reporting and analytics.

A model office will be set up this year to show to clients ahead of NHS SBS deciding on its implementation strategy.

There is one final issue in the mix. At the end of last year, NHS England launched a discovery project to assess the viability of a single system bringing together NHS finance systems with the electronic staff record. The enterprise resource planning (ERP) system could potentially provide finance, budgeting, procurement, recruitment, payroll, learning and talent management all within a single system. The age of the ESR and the re-tendering of the ISFE has presented an opportunity for an integrated approach.

While there are clear benefits from an integrated approach, there are some concerns that the sheer size and complexity of the project could create huge risks. And there may be other ways to realise the benefits.

Mr Sutcliffe says NHS SBS would be interested in bidding if that was the option the Department of Health and Social Care decided to pursue. But he said the services wrapped around any system would be as important as the system itself. And even if the single system did not go ahead, there was a clear requirement for systems to talk to each other better than they do today.

The ISFE contract extension may provide stability for NHS finance and accounting in the move to ICSs. But beneath the surface, there are significant changes taking place.