On the 31st March the LSE played host to the 32nd annual meeting of the Management Accounting Research Group, founded by CIMA Past President, Professor Michael Bromwich and sponsored by CIMA’s General Charitable Trust.

The theme for the day, which brought together leading academics and practitioners, was Cost Management Strategies and there was a strong focus on the UK's National Health Service. This was particularly fitting because the 31st of March was also the NHS financial year end.

With the Health and Social Care Bill currently working its way through the UK parliament, it was very timely to be discussing strategic cost management within the NHS. Professor John Cullen of the University of Sheffield kicked off the conference by reminding us how management accounting can act as a driver for innovation.

He presented a case study which demonstrated how management accountants had facilitated the introduction of Foundation Units within a Foundation Trust. Once awarded with Foundation Unit status, those organisations are allowed to retain up to 80% of their surplus, giving them the autonomy to create pioneering treatment for patients.

CIMA Council member, Robin Bellis-Jones of Bellis-Jones Hill Healthcare Management Solutions, led the afternoon session and opened it by sharing some key facts about the NHS:

•  £9bn annual turnover in 1948 (at today’s value)
•  £100bn+ annual turnover now
•  1 million patients treated every 36 hours
•  10,000 GP practices

Given the size and complexity of the NHS and the practices, hospitals and trusts which constitute it, Bellis-Jones called for an activity based costing approach that can address all aspects of service line reporting and patient level costing.

He urged delegates to read the CIMA sponsored research undertaken by Imperial College which found that ABC analysis of cost behaviour in the NHS is a tool providing so many attractions that it far outweighs the cost of implementation.

Over the weekend the press widely reported that UK Prime Minister David Cameron was considering key changes to the Health and Social Care Bill. CIMA wonders if he was at the MARG conference too?