Southend Hospital NHS Foundation Trust invests £28,000 to comply efficiently with NHS 'Payment by Results' initiative

Southend Hospital NHS Foundation Trust, one of the UK's major hospital trusts with 3,900 staff and an annual income of over £160 million, has invested £28,000 in an important move to ensure that its financial accounting systems relating to capital expenditure fully comply with the requirements of the Capital Accounting Manual and NHS Foundation Trust Financial Reporting Manual and provide valuable data for the new NHS Payment by Results system.

Southend Hospital NHS Foundation Trust is an acute hospital trust which each year treats, on average, about 75,000 'spells' (the standard new unit of measurement that describes a completed consultation or in the old terminology a Finished Consultant Episode). During the same year the Trust also treats 330,000 outpatients and 84,000 Accident & Emergency casualties. Today, it is a single-site District General Hospital, following the completion in 1995 of a £27 million development scheme involving the transfer of acute services from nearby Rochford Hospital.

The aim of Payment by Results is to provide the NHS with a transparent, rules-based system for paying trusts. Payment by Results rewards efficiency, supports patient choice and encourages trusts to effect sustainable reductions in waiting time.

An essential part of Southend Hospital NHS Foundation Trust's financial management is its ability to allocate capital expenditure to the specific services which the capital was designed to develop. Like all NHS Foundation Trusts in the new Payment by Results environment, Southend Hospital needs to keep even more precise records than before of its utilisation of capital. The quality of its ongoing knowledge of this utilisation and its ability to maintain an exact record of how much capital was allocated to which kind of service is crucial to the Trust's financial health and ability to report back to the Department of Health.

The quality of the Trust's financial reporting was always important, but has become even more so in recent weeks due to the implementation of Payment by Results in all NHS Trusts from April 2005.

Ian Child, a financial accountant at the Trust, explains: 'Today, an NHS Foundation Trust has to account for and monitor its funding accurately, just as would be the case in any large business organisation. The capital we receive from the Government is given to us in order that we can generate and show a return on it. The accuracy, on a day-to-day basis, of the tracking of our capital allocation is extremely important to us. Using the new system Series4000 software from Real Asset Management (RAM) we can now monitor precisely how much capital is allocated to individual services and activities and what cost-savings, or increases in activity, we have Ian Child adds: 'We make particular use of the Project4000 (Project cost control software) module of the software. This module allows us to match capital expenditure to assets with particular precision. By identifying each asset, we can easily reconcile our register with the medical equipment database and capital expenditure reports.'

Before the Trust bought in the Series4000 software, Child and his colleagues used an in-house database to record assets and capital expenditure. But as he explains: 'This caused problems, because the database system did not allow us to keep track of any errors we might have made. We therefore did not have the opportunity to rectify them. An equally serious problem was that the database had no audit trail facility. The use of the new, specialist, software has solved these problems and now all events and transactions are fully traceable on the system.'

Ian Child adds: 'With our new specialist Series4000 software system we have a powerful resource which allows us to match capital costs to services and income from Payment by Results and to ensure that our internal efficiencies and the quality of our utilisation of taxpayers' money are given proper attention in our detailed accounting records.'

Back to previous page