The urgent repair bill for the NHS jumped to nearly £1,000 last year. Peter Byrne/PA
The Department of Health’s financial chief has said that Whitehall’s oversight of capital spending by NHS trusts is too "opaque" and that he is "not wildly happy” about the system of financial accountability in the health sector.
David Williams, director general finance at the health department, told MPs yesterday that there was a gap between the allocation of funding by his department and accounting for how it is spent at a local level.
He was called before the Public Accounts Committee to discuss the sustainability of finances in healthcare, following health secretary Jeremy Hunt’s decision last year to switch £1.2bn out of the total £4.8bn NHS capital budget into the revenue budget, which is used for day-to-day spending.
This has led to concerns over the backlog of maintenance work – a report compiled by NHS Digital published earlier this month found that the cost of urgent repairs to health service buildings and equipment jumped 22% last year to £947.1m.
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Williams said the switch will have been reversed by 2021, and that he is working with NHS Improvement to assess the backlog and the nature of the approach required to address it.
But when chair of the spending watchdog and Labour MP Meg Hillier complained that he was “very good at giving civil service answers”, and pressed him to be clearer on Whitehall oversight of potential problems arising from the delay in capital investment, he said some calculations need to be done locally in the first instance.
“Within the department we do not have a systematic way of understanding the detailed decisions that are necessarily the purview of local wards and executive management teams,” he said.
Williams was asked by Luke Graham, Conservative MP and PAC member, about whether the department is able to assess the impact at a local level of individual health providers taking capital expenditure and putting it into revenue.
He responded: “I’d make a slightly different point that within any fixed budget for capital, whatever the value, the direct line of sight between the department and how that money gets spent at the local level is quite a complex chain – but that is the system within which we operate.”
He added: “Line of sight through the system on the core capital budget is quite opaque. I’m not wildly happy about that but it’s the system I have to operate.”
Williams confirmed that “at a high level” the department can trace the percentage breakdown in capital spending of NHS trusts between, for example, maintenance, improvement and new programmes or schemes.
But he said the link between “planning how the money is allocated… and how it actually gets spent is the thing that is tricky”.
Asked directly if financial reporting across the health sector was more opaque than he’d like to see it, Williams said: “Yes, personally.”
Sir Chris Wormald, permanent secretary at the Department of Health, also questioned by the PAC, explained that the department could determine whether a hospital is spending money efficiently and delivering a good service through mechanisms such as NHS trust accounts and Care Quality Commission ratings.
But he added that in the health sector most financial decisions are delegated to the local level, where “the unit of aggregation is the individual trust”.
He told MPs that a system of oversight allowing civil servants to directly trace the impact of government policy down through to local provision, would not be in line with the department’s current governing legislation. “It’s not a question for us,” he added.