NHS England Tightens Financial Oversight

NHS England has emphasised that chairs, chief executive officers, and other board members will be held accountable for financial difficulties at trusts. According to guidance obtained by Following the Money, the national team views responsibility for balancing the books as extending beyond finance directors.

The document, dated August, introduces a stricter stance toward trusts experiencing cash shortages. Over recent years, NHS England (NHSE) has increasingly restricted access to cash support, compelling trusts to intensify efforts on cash-releasing savings.

Earlier this year, Barking, Havering, and Redbridge Hospitals revealed that NHSE had advised some trusts to "consider" delaying payments to suppliers. This advice sparked an angry reaction from NHSE headquarters, which insisted trusts should utilize the full agreed payment periods but remain compliant with the Better Payment Practice Code time limits.

NHSE argues that all systems operate under balanced plans, reinforced by an additional £2.2 billion in cash-backed deficit support funding, matching income with planned expenditure. The expectation is that if trusts adhere to their plans, cash issues should not arise. In cases where plans falter, deficit support may be temporarily withdrawn but can be reclaimed later in the year. NHSE also encourages providers running low on cash to seek assistance from neighboring trusts before approaching NHSE.

The guidance states that cash support withdrawal should only occur in "truly exceptional circumstances." Such actions will have consequences for both the finance director and the wider board. The document warns that requesting cash should be a last resort, signaling that the board lacks control over the financial situation. This will trigger a series of measures and reporting requirements, holding chief executives and chairs accountable.

Governance and Directive Interventions

NHSE’s updated guidance highlights that the "biggest learning" from last year’s investigation and intervention oversight regime for overspending systems was the absence of basic financial governance in many organisations. An evaluation of the 2024-25 regime, shared with finance directors, exposed fundamental failings. These included control measures that existed only on paper but were ignored by staff, spending to increase activity without assured funding, and workforce plans projecting staff increases that contradicted finance plans.

Consequently, NHSE is adopting a more directive approach toward deficit trusts. The guidance outlines interventions such as establishing board committees focused on non-pay expenditure and cash management, conducting well-led finance reviews, and observing finance and audit committee meetings to ensure full engagement from committee members.

A local finance director described the situation as alarming, noting that many boards appear not to discuss cash management adequately, despite the tightening financial environment. They added that NHSE perceives a lack of assurance and insufficient engagement from non-executive directors.

Consultancy and Standardisation

NHSE’s oversight will also extend to consultancy use. While the previous investigation and intervention (I&I) regime allowed systems flexibility in commissioning outside advice, this will shift to a standardized approach with a national specification. More than half of systems were subject to I&I, but NHSE’s new leadership believes improvements are possible.

A senior source familiar with multiple trusts said that while I&I revealed problems with accountability and leadership ownership of financial issues, it failed to resolve them. The source emphasized that CFOs have limited capacity to enforce financial control alone. Sustained financial sustainability requires cohesive leadership that includes CEOs who take ownership of financial challenges rather than delegating to CFOs.

The source also highlighted that current challenges revolve around leaders’ ability to implement necessary, lasting changes.

Supplier Selection and Transparency Concerns

Last year, four firms dominated early I&I advisory work. The Greater Manchester Integrated Care Board (ICB) told HSJ that it selected its supplier from a list of approved firms, though NHSE denied mandating the use of any particular provider.

Following the Money has discovered that despite no official requirement to use specific suppliers, some firms were given a head start. An email from an NHSE regional team to one of the first 10 ICBs placed in I&I, obtained through a freedom of information request, stated that "national colleagues have briefed KPMG, PwC, Deloitte, and PA Consulting," while adding that ICBs were free to choose other suppliers.

A similar email sent to another ICB in a different region indicated that several suppliers were "primed" to undertake the work, although ICBs could select others if they preferred.

The oversight regime was developed rapidly. Freedom of information requests reveal that decisions to place systems under financial oversight were often communicated informally. For example, South Yorkshire reported receiving only verbal notification without any formal written communication.

An NHSE source reiterated that there were no preferred suppliers and that the final selection was left to individual systems.