Manage Your Budget

Chapter 6 Manage Your Budget




Know what your budget is 


Are you managing or just monitoring? 

Your staffing establishment 

Ratio of nurses to patients 

Matching the roster to your staffing establishment 

Prioritise pay 


The importance of good roster management 

‘Buddy up’ with another ward 

Be flexible with your staffing establishment 

Go through your monthly budget statement 


Checking through the columns 

Involve your team 

Manage annual leave 


Calculating the annual leave allowance per roster 

Spreading annual leave throughout the year 

Manage your unplanned absence allowance 


Sickness monitoring 

Maternity leave 

Other leave 

Plan your study leave allowance 


Other sources of funding 

Mandatory training 

Get your staff involved in non pay 


Pharmacy/drugs 

Medical supplies 

Stationery 

Be more active in the business planning process 


The business plan 

How to write a business case 

Don’t do anything without identified funding 


Get it in writing 

Meet regularly with your finance advisor 


If you manage a ward or department, then you also manage a budget. Don’t let others manage it for you. You are the most appropriate person to ensure this money is used appropriately and effectively. Only you understand what the needs of the patients are on your ward, and the demands on your staff. Only you can decide on the different mix of bands and skills required within your team. And only you have an idea about the amount of equipment and consumables required.


Some ward managers say that their clinical duties are more important than the budget, but it is the budget that determines what you can and cannot do clinically. How well the budget is managed directly affects how good the care is on your ward.



Know what your budget is


It typically costs in excess of £1 million per year to run a ward. The amount obviously varies depending on the number of beds and specialty. Most ward managers claim they manage a budget but few can say what their budget is when asked. Do you know what your budget is? It is very important you are aware of how much money you are responsible for, and where and how it should be spent.


The actual figure will be shown on your monthly budget statement. It is the total amount at the bottom of the column marked ‘ANNUAL BUDGET’. The budget is usually much bigger for areas such as intensive care units and accident and emergency departments.



Are you managing or just monitoring?


Having such a large amount of money is quite a responsibility but some make the mistake of assuming that checking through the monthly statements is all that’s required. This is not managing the budget, it’s simply monitoring it.


Actively managing a budget entails:



image planning how next year’s budget will be spent


image keeping to specific guidelines for allocating annual leave, sickness and study leave allowances


image performing regular staffing, skill mix and workload reviews


image being fully involved in the yearly business planning process, which includes identifying cost pressures and service developments and writing business cases where necessary.



Your staffing establishment


Staffing costs should be regularly revised following any changes in workload. There are several off-the-shelf tools currently in use for reviewing skill mix, such as GRASP (2011) and Q-Acuity (Qualitiva 2011) and the Safer Nursing Care Tool (NHS Institute for Innovation and Improvement 2009). These tools calculate the patients’ care requirements in terms of staff numbers and grade mix. The measurements determine the ideal numbers and types of staff required per shift or the ideal numbers per group of beds, e.g. one nurse to five beds. A skill mix review will not automatically get you more staff, unfortunately. You need to get involved in the commissioning and business planning cycle to be able to influence your staffing levels (see p. 111).


Currently, many nurse managers use their own in-house criteria to determine their staffing numbers, such as:



image no less than two registered nurses per shift


image no less than three staff on nights


image one extra registered nurse each shift for ‘theatre days’, etc.


The nurse manager’s intuition and common sense with regards to staffing requirements are often far better than any skill mix review.



Ratio of nurses to patients


In California (USA) and Victoria (Australia), the mandatory requirement for the number of nurses to patients on medical/surgical wards is 1:5 plus one in charge (International Council of Nurses (ICN) 2009). In the UK, there is no specific legal requirement for wards. In general, the average ratio in the UK is 1:9 patients on general wards, and 1:11 patients in wards for care of the elderly (Ball 2010). This is evidently below the practice in California or Australia – especially with research showing that the decrease in nurse:patient ratio from 1:4 to 1:8 results in a 31% increase in mortality (Aitken et al 2002) – but in spite of this, at the time of writing, there are no plans to introduce any statutory requirements in the near future.


While we do not have any statutory guidance on nursing numbers, we do have the Royal College of Nursing (RCN) guidance on the ratio of nurses to health care assistants (HCAs). This has been referred to as a ‘rule of thumb’ in several investigations such as that undertaken at the Mid Staffordshire NHS Trust in 2007. The RCN recommendation is that ward establishments should comprise 65% registered nurses and 35% HCAs (RCN 2006), so bear this in mind when reviewing your staffing levels with your line manager and finance advisor. Do not accept any less. Put it in writing if you are being forced to do so. The NMC code states quite clearly that ‘you must report your concerns in writing if problems in the environment of care are putting people at risk’ (Nursing and Midwifery Council (NMC) 2008). In England, the NHS Constitution states that patients have a right to be treated by ‘appropriately qualified and experienced staff’ and, in addition, demonstrating sufficient staffing is a requirement for registration with the Care Quality Commission (CQC 2010, Department of Health 2010).



Matching the roster to your staffing establishment


Your staffing establishment is worked out by your finance advisor using information from your roster (i.e. the minimum staffing levels required per shift that either you have identified personally or through a formal skill-mix review). It is essential that the minimum staffing levels on your roster match the numbers in your staffing establishment. If you do not know for sure, ask your finance advisor to work it out for you.


Each directorate usually has a dedicated finance advisor. It is their job to work with you to help you ensure the budget is right for your needs. It is your job to maintain regular contact with them. If you do not, who is it they are getting their information from? And how accurate is that information?



Prioritise pay


Your budget is made up of two parts:



1. PAY – this section reflects the salaries of your staff.


2. NON PAY – this section contains the money for equipment and consumables.


The PAY section takes up the first part of your budget statement. It is the part that you need to concentrate on because it usually comprises at least 80% of your total budget.



The importance of good roster management


If your PAY budget is overspent, it can be due to inefficient rosters. To manage the PAY part of your budget effectively, you need to:



image ensure your staffing establishment matches your required ‘numbers’ on the roster


image manage the 20–23% allowance, which covers annual leave, study leave and unplanned absence such as sick leave


image control agency and bank usage to within the 20–23% allowance.



Staffing establishment


You will probably have set minimum staffing levels for each shift over a 7-day week (Table 6.1). The person who does the roster then allocates the staff to meet those minimum levels on each shift. Your staffing establishment (which you should receive with your monthly statement) is worked out based on your set shift requirements (Table 6.2). You must check regularly with your finance advisor that they match up. If you do not ensure that the staffing establishment meets the set shift numbers then you cannot devise the roster within budget and are therefore failing to manage it.



Table 6.1 Example of minimum staffing levels over 7-day week

image

Table 6.2 Example of a ward staffing establishment



































Description Budget (WTE*) Actual (WTE)
Ward manager (band 7)  1.0  1.0
Sister/charge nurse (band 6)  2.0  1.8
Staff nurse (band 5) 12.0 12.2
HCA (band 4)  8.0  6.0
HCA (band 3)  5.0  7.0
Ward clerk  1.0  1.0
TOTAL 29 29

*WTE, whole time equivalent; 1.00 WTE is full time, < 1.00 WTE is part time.



20–23% absence allowance (which should be built into your establishment)


When your finance advisor works out your staffing requirements, they use your roster numbers but also put in an additional 20–23% to cover annual leave, sickness/absence and study leave. It means that your final staffing establishment should provide you with enough to cover your annual leave, sickness/absence and study leave requirements and remain within budget.


Sometimes some of this allowance is separated as a separate line within your budget statement and labelled as ‘bank/agency costs’.


The additional 20–23% usually comprises:



image 13.5% annual leave and bank holidays (27 + 8 = 35 days)


image 1–2% study leave (2.5–5 days)


image 5–7% unplanned absences such as sickness, maternity, compassionate and carers’ leave (13–18 days).


If you do not manage annual leave, sick leave and study leave correctly, you can overspend unnecessarily. Check out with your finance advisor exactly what percentage your organisation adds to cover absence allowance. Without knowing this figure, you cannot manage your PAY budget effectively.



Bank and agency usage


Use bank (NHS Professionals in England) instead of agency wherever possible. They cost little more than permanent staff. If you are sent an agency nurse because no bank nurses are available, an additional 33% is usually charged in commission to the agency. This means that for every three shifts covered by agency staff, one shift should remain unfilled in order to make up for the extra cost. Obviously this needs to be handled very carefully because, at the same time, you cannot compromise patient care. Some managers compensate for the extra commission charges by booking agency nurses for a ‘half shift’ only.


In some organisations, the most popular shifts for bank staff are early shifts. This means that the late and night shifts are covered by agency. It therefore makes sense to compile rosters to ensure that most late and night shifts are covered by your own staff, leaving the vacant shifts mainly as early shifts. This will ensure that there is a higher chance of getting bank staff rather than agency.



‘Buddy up’ with another ward


Try and work closely with another ward manager and share staff between your two wards during the hard times. It is advisable to link up with another ward or department with a similar specialty within your directorate for the purpose of sharing staff. You could meet with the manager once per week to go through the next week’s roster. This enables you to identify areas where resources could be shared and to plan ahead for expected shortfalls.



Be flexible with your staffing establishment


Be more flexible with your staffing establishment. If you are unable to recruit a certain grade of staff into your vacant post, then consider other options. Can you replace with a different grade of staff? Think carefully; perhaps it would be better to employ an available lower grade of staff rather than fill the vacancy continually with bank and agency.

Related posts:

  1. Manage Difficult Situations
  2. Instigate a Rolling Recruitment Programme
  3. Manage Staff Performance
  4. Look After Yourself

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Jun 15, 2016 | Posted by in NURSING | Comments Off on Manage Your Budget

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