Change in NHS accounting rules will bring greater transparency

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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

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