Six principles of NHS recovery

13 December 2017


In the final blog in our series looking at financial recovery in the NHS,  we set out some key principles that organisations should consider when taking action to improve their financial position.

There is no doubt that the NHS is facing unprecedented challenges - not just in terms of finances but also in terms of demand and expectation. In these circumstances, financial control is the vital first step to making the NHS sustainable. It’s only on this platform that long-term, transformative change can be built.

While individual trusts aren’t always fully in control of their own destiny, there is more that can be done to ensure the processes and systems are in place to avoid financial distress at a local level. The efforts to improve the financial performance of organisations can progress with more focus and pace if the basic pillars of change are adopted.

Our extensive experience in supporting organisations to manage their financial turnaround, with insights from our clients, is highlighted in The road to recovery. The lessons we share are important, both for a successful financial recovery, and for those seeking to ensure they get ahead of the game and stay there.

Through our work with NHS organisations we have identified six steps organisations should take to avoid further decline and to consciously plan for improvement:

  •  The financial challenge and causes

 It sounds simple but do you know the full scale of the challenge you are trying to solve? There needs to be a robust and shared understanding of the financial baseline and underlying deficit. A clear understanding of the causes and drivers of the deficit can help you focus.

  • Clarity of purpose

 With the competing priorities you face, it is essential that your stakeholders accept and understand the imperative for change. You need to galvanise operational focus behind that change.  Financial improvement needs to be prioritised on the trust’s agenda from ward to board.

  •  Effective and cohesive leadership

 There needs to be effective leadership spanning out from the executive team and reflected across all clinical divisions/directorates. Finance should never be a priority above patient care but it does need parity of importance to ensure your organisation is sustainable. Experience suggests you should involve non-executive directors (NEDs) in financial recovery: their scrutiny, peer review, rigour and expertise can be invaluable.

  •  Clear plan of action for turnaround

 It’s essential to build a recovery plan that addresses the individual root causes of the deficit rather than the deficit as a whole. Stabilising the in-year position and showing progress against your plan to gain credibility with the regulator and stakeholders is key.

  •  Clear communication

 There needs to be clear communication to all levels across the organisation to engage, explain and update on key matters. Celebrating successes and building this into the organisation’s culture is key so that the financial challenge doesn’t seem an impossible mountain to climb.

  • Effective governance

 Clear lines of accountability to the board from operational project leads through sub-committees are key as is divisional leadership accountability for delivery. You must strengthen grip and understand and monitor your run-rate. A well-resourced and functioning PMO to support divisions in delivery is vital.

We are fully aware that implementing these steps is not always easy  - turning is, of course, an extremely complex issue. But we hope this provides some food for thought for dealing with your own situation. We have developed a full approach to dealing with turnaround in the NHS in our publication The road to recovery. Please do get in contact with us if you’d like to discuss this further.

David Morris

David Morris | Business Recovery Partner
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Sam Knollys

Sam Knollys | Director
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