Pearson BTEC HND Diploma Health and Social Care

Unit 14: Managing Financial Resources in Health and

Social Care
Lesson 2:
Information: business costs eg people, equipment, finance, buildings, consumable items, administration;
income streams; trends and external influences eg changes in policy, competitive factors, legal
requirements

Regulatory requirements: legislation and codes of practice, audit, accountability, policies

Systems: sources of income, how budgets are set, administration of budgets, cost centres,
accountabilities, audit requirements

By Shan Wikoon
Unit 14: Managing Financial Resources in
Health and Social Care
1.2 identify
information needed
to manage financial
resources

1.3 identify
information needed
to manage financial
resources

1.4 evaluate systems

for managing financial
resources in a
health or care
organisation
Information needed to manage financial resources

people, equipment,
finance, buildings,
consumable items,
administration; income
streams

People cost
Information needed to manage financial resources

Equipment, finance,
buildings, consumable
items, administration
Information needed to manage financial resources
Income streams
Trends and external influences
Market information
Trends and external influences
eg changes in policy
Trends and external influences
eg changes in policy

Care Act 2014

The Care Act factsheets, revised
regulations and guidance for local
authorities
Trends and external influences
eg changes in policy

Direct Payments For Care

From April 2014 the payment of care will change for local authority funded patients. From April
there will be an allowance paid to the patient or relevant guardian who will then be responsible for
sourcing and paying for their own care.

The reason local authorities have taken this route is to remove the need to manage payments and
invoicing, reduce administration and quasi outsource this work back to the individual. The price of
providing care cannot be reduced and the burden of care will only increase, local authorities are
therefore looking to reduce their internal cost of providing care.

The effect this will have is that the patient (or guardian) will be presented with a list of care
providers and will be able to chose. This will mean that care is value driven rather than price.
Information needed to manage financial resources
Trends and
external
influences
Eg.

Competitive
factors
 Information needed to manage financial resources

Trends and
external
influences
Legal
requirements
examples

http://www.cqc.o
rg.uk/content/pr
ovider-handboo
ks
 Information needed to manage financial resources
Trends and
external
influences
Legal
requirements
examples

https://www.gov.uk/go
vernment/uploads/syst
em/uploads/attachme
nt_data/file/506202/23
902777_Care_Act_Bo
ok.pdf
 Where we are?

1.3 identify
information needed
to manage financial
resources
 Common Regulatory requirements

http://www.cqc.org.uk/content/regulations-service-providers-and-managers-relevant-legislation
 Regulatory requirements
Care Quality Commission (Registration) Regulations 2009: Regulation 13
 NHS Regulatory requirements

Step 1: Managers/commissioners begin by drawing up a specification of services or product

required, setting out the delivery targets, expected outcomes, and penalties for failure to meet
these. They would not specify a price.

Step 2: Requerments is advertised on the http://www.supplying2nhs.org/ as well as in local

media, newspapers, and/or on trust websites, inviting expressions of interest.

Step 3: Potential providers submit tenders containing the proposed price for service activity.

Step 4: The tender will be awarded to one selected provider. The level of activity required,
performance monitoring frequencies, terms, and cost, would be defined within their
agreement.
 THE NHS APPROVED COSTING GUIDANCE
According to Monitor (2013), the NHS financial regulator, who published the
costing principles that should be followed by health and social care managers.
Quoting one of the managing director of MONITOR, Adrian Masters saying;

Understanding the real cost of patient care is an essential element of this

new role. Costing services accurately has the potential to deliver higher
quality care to patients and better value for the NHS, both through better
prices and improved information for clinicians and other decision makers at
health care providers (MONITOR, 2013 p.2)

The Approved Costing Guidance sets out the approach to costing that Monitor
encourages providers of NHS-funded services to adopt

MONITOR (2013) Approved Costing Guidance. Available at:

http://www.monitor.gov.uk/sites/default/files/publications/6JuneResissuedApprovedCostingGuidanceToPublish.pdf
 The six costing principles approved by the NHS
Principle 1 Stakeholder engagement
Effective costing requires input from a wide range of stakeholders, including
non-finance staff.

Principle 2 Consistency
For some costing purposes, a consistent approach is required across or
within organisations.

Principle 3 Data accuracy

Accurate costing relies on the quality of the underlying input data.
The six costing principles approved by the NHS (contd)
Principle 4 Materiality
Costing effort should be focused on material costs and activities.

Principle 5 Causality and objectivity

Costing should be based on an understanding of causality to minimise its
subjectivity.

Principle 6 Transparency
Costing should be transparent and auditable
Other regulatory requirements for any business

Annual Accounts & Audit Review

Personal & Inheritance Tax Planning

Business Tax and VAT Planning and Returns

Funding Assistance and Business Planning

Capital Gains Tax and Business Succession Planning

Bookkeeping and Support

Incorporation and Business Start-ups

Company Secretarial Services

Payroll Bureau and Employee Issues

1.4 evaluate systems
for managing financial
resources in a
health or care
organisation
Information needed to manage financial resources
Income

https://www.youtube.com/watch?v=HeX6nmkqYX0
The problem:
 Budget
A budget is a formal statement of estimated
income and expenses based on future plans and
objectives. In other words, a budget is a document
that management makes to estimate the revenues
and expenses for an upcoming period based on
their goals for the business.

A budget is a quantitative expression of a financial

plan for a defined period of time. It may include
planned sales volumes and revenues, resource
quantities, costs and expenses, assets, liabilities
and cash flows.
Budget
Evaluation of budgetary control system
Financial audits
A financial audit provides a way to assess whether the businesss financial
statements satisfy accounting requirements.

Financial statements should be prepared in accordance with the relevant

accounting standards as applicable to the entity. Statements about past
performance should be fair, accurate, complete and reliable.

Examples of what a financial audit may cover include:

Asset management
Travel expenditure
Payroll
Income and expenditure
Budgeting and forecasting process
Accounts payable
Evaluation of system for managing financial resources
Systems
Cost Center
 End.

About the tutor...

Shan is an experienced HND tutor and assessor who works in London, UK. He has a Degree of Master
of Laws in Law of International Trade - University of Wales, a - Diploma in Business Administration, a
Degree of Bachelor of Law and a Diploma in Computing.

If your institution is in London and seeking reliable tutors, please contact Shan on
shanwikoon@gmail.com