Central finance system could save NHS millions

The NHS could save £180m per year if trials of centralised finance systems are successful.

From October, two pilot sites running financial management applications will be used to test the 'shared services' model - where the NHS consolidates administrative processing onto centralised systems serving the whole organisation.

Once fully live in March 2003, central systems in Leeds and Bristol will process all financial transactions for the 45 health service organisations in West Yorkshire and the South West - a combined annual turnover of £4.6bn.

The project has a two-year budget of £21m and work started in October 2001.

The success of the pilot will be independently evaluated by the Department of Health (DoH), probably in early summer 2003. Based on those findings, the DoH will decide whether to roll the system out nationally.

Early feasibility studies showed a shared services finance system could save £180m per year on administrative overheads by automating manual processes, says Philip Hewitson, chief executive of the NHS Shared Services Taskforce (SST), which is overseeing the project.

'The system could transform the standard, quality and timeliness of management information in the NHS.

'At the moment there are 34 different ledgers and 54 fixed asset systems so it is very difficult to collate information.

'And the figure for potential savings doesn't take into account the benefits from improved management information or the flexibility it gives front line clinical managers in organising budgets and manpower,' said Hewitson.

The pilots tie in with the procurement of a national ecommerce and finance system by the SST (see Computing 23 May), which is expected to cost £450m over 10 years. The taskforce is also responsible for last December's £325m deal for a national human resources system to create electronic staff records.

During the test phase the two sites will run Oracle Financials software procured through an existing framework contract. This is short term agreement that doesn't guarantee Oracle will win the national contract, says Hewitson.

'We wanted to get the national procurement underway so the pilots could be early implementers but the procurement began to run behind so we have had to use an interim arrangement,' he said.