Charging for Capital in the National Health Service in Scotland

Heald, David; Scott, David A.

doi:10.1111/j.1468-0408.1995.tb00161.x

Cited by 13 publications

(5 citation statements)

References 12 publications

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“…The desire to produce financial accounts compatible with those of the private sector has raised issues of introducing capital charging (e.g. Coombs and Edwards, 1992; Heald and Scott, 1995; 1996; Heald and Dowdall, 1999; Carlin, 2003; Christiaens, 2004). When cash accounting was used in the sector then there was no overt mechanism for capital charges or for asset depreciation to be recorded.…”

Section: Significant Trendsmentioning

confidence: 99%

Public sector to public services: 20 years of “contextual” accounting research

Broadbent

Guthrie

2008

Accounting, Auditing &Amp; Accountability Journal

400

397

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PurposeThe purpose of this paper is to review and critique the field of public sector accounting research. Many nation states deliver essential public services. In recent times, many of these nations have been involved in programmes of “modernisation”, which, in part, means that these public services now are significantly managed, delivered and governed by private and third sector organisations.Design/methodology/approachThe paper employs a literature‐based analysis and critique of public sector accounting articles published in the selected journals from 1992 to 2006. From this, a descriptive meta‐analysis of the characteristics of the research will be discussed. Finally, a conceptual analysis of the selected literature will be used to evaluate the field and address a possible future research agenda.FindingsThe descriptive analysis highlights that among the research papers reviewed several interesting patterns emerged concerning public service research. Also, the dominance of Australasia and UK research was noted. The extent of research in different levels of government/jurisdiction indicated that the majority of research was organisationally based. Finally, when the various functional types of accounting are considered, management accounting remained the most researched area of interest.Research limitations/implicationsThe paper only considered research within eight selected journals and over the period 1992 to 2006. Therefore, for instance, US mainstream public sector accounting research has not been reviewed.Originality/valueThe main implications of the paper are that “contextual” public service accounting research has a strong tradition and, through the process of reflection and critique of the body of work, several important insights are provided in order to highlight areas for further research and policy development.

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Section: Significant Trendsmentioning

confidence: 99%

Public sector to public services: 20 years of “contextual” accounting research

Broadbent

Guthrie

2008

Accounting, Auditing &Amp; Accountability Journal

400

397

View full text Add to dashboard Cite

show abstract

“…In the case of PFI the charge for capital is therefore impacted in the regular payment to the private sector. This has proved controversial as it is argued that the capital charge is thereby being 'siphoned out' of the public services (Mayston, 1989 andPerrin, 1989;Mellett, 1990;and Heald and Scott, 1995) in a way that was not previously the case. Hence the previous situation saw the re-cycling of the capital charges back to the NHS where it increased the resources available to re-invest.…”

Section: Pfi In the Nhs: A Project In Modernisationmentioning

confidence: 99%

The Role of PFI in the UK Government's Modernisation Agenda

Broadbent

Laughlin

2005

Financial Acc & Man

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This paper examines the extent to which PFI is a product of a modernisation agenda and its role in furthering it. We define modernisation using an analysis of the UK Government's legislation and pronouncements framing it in the context of New Public Financial Management (Olsen et. al, 1998). The paper uses the example of healthcare to consider recent changes in the procurement and accounting for infrastructure investment. Finally we evaluate the use of PFI in the context of NPFM and the modernisation agenda and consider whether the public sector should provide funding for the infrastructure of the public services.

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“…As noted earlier, issues of accounting methodology are not pursued in this article. It should, however, be noted that there is a strong body of research which indicates that CCA does not fully resolve capital charging problems arising from changing asset replacement costs (Heald and Scott, 1995;Mayston, 1992;Mellet, 1990).…”

Section: Notesmentioning

confidence: 99%

Capital charges and capital expenditure decisions in core government

Robinson

1996

Journal of Public Budgeting, Accounting &Amp; Financial Management

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The application of capital charges to core government agencies (those which produce tax-financed outputs) is one of a number of steps being taken by certain governments as part of a broader strategy to place such agencies upon a market footing. Capital charging involves the levying upon these agencies of charges designed to reflect the cost of the capital which they employ. This article presents a theoretical evaluation of capital charging which identifies the manner in which imperfect information, uncertainty and the expenditure control imperative undermine the system's raison d'être. INTRODUCTION: THE RATIONALE OF CAPITAL CHARGESWhen a commercial enterprise raises funds to finance capital expenditure, those funds do not come free. In the case of debt, there is an obligation to pay interest and, ultimately, to repay the principal. In the case of equity capital, there are shareholder expectations of return. There is, consequently, a powerful incentive for enterprises not to borrow -and for lenders not to lend-unless future earnings are expected to be more than sufficient to pay for the weighted cost of capital employed. Elementary finance theory teaches us that it is upon price signals of this type that the efficient allocation of savings in a capitalist economy depends.In core government, things are different. Core government refers to that part of government which produces outputs which are not sold on the market, but are provided free to consumers. It therefore comprises

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Charging for Capital in the National Health Service in Scotland

Cited by 13 publications

References 12 publications

Public sector to public services: 20 years of “contextual” accounting research

Public sector to public services: 20 years of “contextual” accounting research

The Role of PFI in the UK Government's Modernisation Agenda

Capital charges and capital expenditure decisions in core government

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