GPs are doctors, not accountants

Ann Robinson wrote an interesting article for The Guardian on 12 July (available here) setting out her view that GPs should not be expected to be accountants. I agree with that, and with much of the sentiment of Ann's article, but I differ in a couple of respects. Firstly, anyone who is responsible for spending public money should be accountable for their decisions. That means that they have to learn how to manage the money they are entrusted with. This doesn't mean that they have to be able to draw up a statement of accounts (that should be left to accountants who enjoy that sort of thing) but it does mean having an understanding of the financial constraints they work in, knowing what they want to buy (or sell) and how much it will cost.  They ought to be able to get a monthly financial report from their accountant and the should seek (and listen to) the accountant's advice albeit that the final decision and the accountability is theirs 

My second point is that commissioners and accountants are not the same thing. As I understand it, Andrew Lansley's proposals are for GPs to form consortiums and through these determine how health needs in their local area are met. There will still be a need for accountants to "keep the books" for the consortiums and presumably provide advice if a consortium is running the risk of its expenditure exceeding the approved budget. Even without seeing the detail of the proposals I find it difficult to imagine the government would not require the consortiums to set annual budgets and provide regular reports to the Department of Health of their spending against their budget. That smacks of bureaucracy but, whilst bureaucracy is oft-regarded as negative, the fact of the matter is that bureaucratic structures are good at control. And the government needs to control NHS spending tightly because a 1% over-spend would put a £1billion-a-year hole in their plans.

 

A further thought about publishing financial transaction data

After yesterday’s post I was thinking about the idea of lean systems (about which John Seddon is a leading exponent). I am not an expert in the design of lean systems but what I understand about it is that it requires the system to be designed from the customer’s point of view. Ideally a system will only produce what the customer demands, and it will do it right first time. This minimises waste. For example, it is better for a car manufacturer to build exactly the cars that customers have ordered rather than produce a huge car park full of cars of all models and colours and then try to find customers for them.

 

On that basis the proposal for councils to publish a pile of raw data of all payments over £500 is the exact opposite of lean thinking. It is tantamount to the old-style paternalism of local government: here’s the data, get on with it. Council will still receive requests for information as they do now, partly because the public are interested in more than just payments to suppliers and partly because people would rather have the data customised for them by the council. There’s a risk here that councils will have to do the work twice, a waste of resources at a time when they are being urged to reduce their expenditure.

If you want to know a bit more about lean thinking you could try looking here.

'There's no end of trouble'

'There's no end of trouble'

From January local councils will be forced to declare spending over £500, while improving transparency has been broadly welcomed - some think a more targeted release of data is more desirable

  • Public,

    Monday 12 July 2010 10.34 BST

foi The gloves are off. From 1 January local government will be expected to release all their financial data online. Photograph: Getty

"While I was still experimenting, I saw only the advantages of the thing. But there are disadvantages, I can tell you." The words of Griffin, the hero of HG Wells's The Invisible Man, and something of an authority on the equivocal benefits of transparency.

Local government will soon understand what he means, following the announcement in June by communities secretary Eric Pickles that from 1 January councils will be expected to publish details of all expenditure above £500.

As an exercise in improving openness and accountability, the move has been broadly welcomed. In terms of the sheer amount of information that must be disclosed next year – not only new items of local government spending, contracts and tenders over £500, but also frontline service data including allowances, expenses and senior salaries – councils may find themselves agreeing with Griffin's neat summation of what it means to be seen through: "There is no end of trouble."

John Simmonds, cabinet member for finance at Kent county council, agrees with the move but would prefer a more targeted release of data.

He raises the "huge number of spurious" Freedom of Information requests the council receives, "which require a huge amount of work for no purpose".

It's easy to toss it all on to a website but more difficult to do so in a meaningful form

"I understand people wanting to know where their council tax is being spent, but would have hoped to consult with the public about the best framework to disseminate this information in terms of its intelligibility – it's easy to toss it all on to a website but more difficult to do so in a meaningful form.

I'm not sure publishing 3,000 separate pieces of expenditure information each week will tell anybody anything. We'll have no problem meeting the deadline, but may need simply to put it up on our website and refine it as we go along."

The Conservative-led Royal Borough of Windsor and Maidenhead, from whom the Tory government drew inspiration for the scheme while in opposition, has been declaring all spend above £500 since March 2009.

It takes a matter of minutes to publish the information in simple CSB format, says chief executive Ian Trenholm; it's for third parties to mine the data and come up with conclusions.

He adds that this "lever for change" has seen residents' satisfaction with the council rocket by 25%.

"Being prepared to expose our data to the public gives people confidence that we're making sensible spending decisions," he says.

"It's like doing business on a trestle table outside the town hall, which alters the way you operate and how people perceive you. Knowing purchasing decisions will be online forces us to think clearly about them – if we're happy to defend them, we'll go ahead. It will stop people making debatable decisions, but not stop them spending money on important things."

Trenholm concedes the biggest problem may be managing queries prompted by the data, rather than the release of data itself, but says initial concerns the council would be inundated have proved unfounded. One of the main risks for councils new to the process, he says, is accidentally publishing personal data – compliance with data protection legislation and general data publishing standards is of paramount importance.

Dr Steve McCabe of Birmingham City University considers it "an interesting exercise [but] another distraction".

"No one can have a problem with openness and transparency, but I wonder how much money the government thinks it will save through this initiative, especially given the scale of the financial crisis?

"There is an argument for reducing waste and expenditure, but despite the image in the press of profligate local government bureaucrats who have no idea where the money goes, in the vast majority of cases there are perfectly valid reasons for spending. Are we going to get to the stage where we get to vote on every aspect of public expenditure?"

It does seem to me that making masses of data available is not the same thing as making information available. I have no doubt that some people have the skills and understanding to mine the data and produce something meaningful but I suspect they are people who does such things for a living. I am not convinced that the average web-user could do it, even if they wanted to.

Financial Management and Accounting in the Public Sector

There are many reasons behind my writing of this blog but I guess the main one is to support my book. Routledge will be publishing Financial Management and Accounting in the Public Sector in April 2011. I'm really excited about that, especially as it will be published in the USA and Canada as well as in the UK. This blog will help me in a couple of ways:

  • as an outlet for some of the material that I have amassed from my research;
  • as a resource for my students
  • as a resource for any other people studying public sector management, particularly if they are not accountants and don't want to be accountants; and
  • if I'm lucky, it will draw some attention to my book when it reaches the shelves of real and on-line book stores.

Jargon

Wordcloud

 

Accounting, like all professions, has its own language. Often an accountant will use an everyday word like asset to mean something much more specific than it would in general use. Such jargon is fine when two professionals are talking to each other because they understand the specific meanings of the words, but it makes life difficult for the non-professional. Things are made yet more complicated in the public sector because there is an additional layer of jargon that it specific to those who work in government. Indeed, even accountants from the private and public sectors may struggle to understand each other because their language is corrupted, too. In the private sector 'revenue' means 'income' but in the public sector it describes operating income and expenditure!

The wordcloud above was generated from the Guardian's Public website. The chances are that I will also be using most of the terms over the coming months. I shall try to avoid technical accounting jargon, just as I do in my book. However, in my book there will be a glossary that is intended to help non-accountants understand and be understood by accountants.