Change in NHS accounting rules will bring greater transparency

The King's Fund today welcomed the Department of Health's move to revise the NHS' accounting rules from the start of the next financial year.

Commenting on the announcement, King's Fund chief executive Niall Dickson said:

'This needed to happen as a matter of urgency. It will not only ensure greater financial transparency in the NHS, but also bring an end to an iniquitous system that has long punished many NHS trusts, who have been caught in an impossible debt trap because of Resource Accounting and Budgeting (RAB).

'Trusts have been punished twice for falling into debt and it is only right that these accounting rules should be changed in light of the Audit Commission’s review of last year. The replacement of cash brokerage with a formal system of loans for NHS trusts is also a move in the right direction.

'Greater transparency and fairness does not alter the fact that there is still a lot to do to achieve financial stability and a significant number of trusts will have deficits. In his announcement NHS chief executive David Nicholson refers to NHS trusts still having to make tough decisions. It is important that these are long-term and strategic and not quick fix cuts.'

Notes to editors: 

1. For further information or interviews, please contact the King’s Fund media and public relations office on 020 7307 2585, 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185.

2. The King’s Fund is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through funding. We are a major resource to people working in health and social care, offering leadership development programmes; seminars and workshops; publications; information and library services; and conference and meeting facilities.