As NHS England and the Department of Health and Social Care move toward a single operating model (see the AB article ‘Jersey’s social care example’), we are entering a pivotal stage of how the health system is governed and transformed.
The 10 Year Health Plan sets out three clear shifts: moving from hospital to community, from analogue to digital, and from sickness to prevention.
At the same time, the government’s Neighbourhood Health Framework places greater emphasis on integration between the NHS, local government and wider partners to deliver care closer to home.
But here is the challenge. Transformation will not be enabled by strategy alone. It will ultimately be determined by the effectiveness of financial policy.
In the NHS, financial policy has become a critical transformation tool
Beyond the vision
This resonates beyond healthcare reform. Whether we are talking about organisations or personal growth, transformation is rarely driven by vision alone. It is shaped by the habits we build, the behaviours we reward and the systems we create to support everyday decision-making.
Financial policies play a similar role within organisations. They are the guardrails that support good decision-making, governance, accountability and the effective use of scarce resources.
In the NHS, financial policy is no longer simply a mechanism for financial control. It has become a critical transformation tool.
In practice, that means:
- Capital rules influence digital and community investment.
- Payment mechanisms determine whether activity genuinely shifts out of hospitals.
- System finance rules affect whether resources can be reallocated across organisational boundaries.
- Governance frameworks shape whether emerging technologies can be adopted safely and at scale.
As we move into this next phase of reform, finance leaders have an important role to play. They can help shape policy that enables change rather than simply constraining it. They can ensure investment decisions are evidence-led, affordable and deliverable. And they can navigate increasing complexity across NHS organisations, social care and local government.
The question is not whether reform is needed; it is whether our financial frameworks are designed to support it.
Multiple lenses
Two policies illustrate the point. The first is the NHS Capital guidance 2026/27 to 2029/30, which introduces a four-year capital settlement, multi-year operational capital allocations, greater regional oversight and dedicated investment programmes to support the shift from analogue to digital. It also explicitly links capital investment to the three transformation shifts outlined in the 10 Year Health Plan.
The second is HM Treasury’s Green Book and the Five Case Model. These require investment decisions to be assessed through strategic, economic, commercial, financial and management lenses, ensuring public money is invested in options that create the greatest overall value.
Financial policy did not always align with the realities of delivering transformation across multiple organisations
My own experience of applying the Five Case Model across digital transformation programmes has shown that successful reform depends on finance and operational teams working in genuine partnership.
Financial policies do not deliver transformation on their own. Their impact depends on how effectively they translate into planning, business cases, governance arrangements, investment decisions and, ultimately, frontline delivery.
Cross-discipline
A few years ago, I served as finance lead for the Shared Care Records programme, a significant digital transformation initiative aimed at creating a longitudinal patient record across multiple healthcare organisations and systems.
While the strategic case for investment was compelling, the programme encountered a practical challenge that many digital programmes across the NHS were facing at the time. Although funding had been secured, local provider organisations struggled to capitalise the expenditure because of the technical accounting requirements associated with recognising digital assets under financial reporting standards governing intangible assets and technology-related investments.
The challenge was not the ambition of the programme; it was that the financial policy and planning environment did not always align with the realities of delivering large-scale digital transformation across multiple organisations.
Finance professionals should be recognised as critical contributors to policy development
Recognising the risk this posed to delivery, I prepared a paper for the programme board outlining the accounting complexities, funding implications and investment risks facing participating organisations. The paper became an important reference point for subsequent discussions on funding structures, capital planning assumptions and the appropriate investment horizon required to support digital transformation programmes.
In developing the paper, I discovered that similar challenges were being experienced across numerous national and regional programmes. What initially appeared to be a local accounting issue was in fact a wider policy challenge affecting the NHS’s ability to move from analogue to digital at scale.
Shaping the future
Reflecting on recent reforms, including the move from annual planning cycles towards multi-year financial planning, this example highlights why finance professionals must be involved not only in applying policy but also in shaping it. The transition to longer-term planning creates greater flexibility for organisations to develop investment strategies that better reflect the lifecycle of digital assets, implementation timelines and expected benefits realisation.
It also reinforces an important lesson. Financial policy is only as effective as the thinking that sits behind it. Policies can either remove barriers and unlock transformation or inadvertently create bottlenecks that slow progress and limit innovation.
This is where professional accountants add value. Through our involvement in business cases, investment appraisal, financial strategy and programme delivery, we are uniquely placed to identify where financial frameworks support organisational objectives and where they unintentionally hinder them.
As the NHS continues its reforms, finance professionals should not simply be seen as guardians of financial control. They should also be recognised as critical contributors to policy development, helping ensure that national financial frameworks enable, rather than constrain, the transformation they are intended to support.
In my experience, the best financial policies are not just technically correct. They are practical, implementable and informed by the realities of delivery. I believe professional accountants, particularly ACCA members, should play a more prominent role not only in implementing financial policy but also in shaping it.
Accountants occupy a unique position at the intersection of strategy, finance, operations and governance. We understand how incentives influence behaviour, where financial controls can strengthen accountability and, equally, where well-intentioned policies can inadvertently create barriers to transformation.
