Today’s task is to review the first stage of budget preparation in a major hospital dealing with a wide range of medical conditions, including accident and emergency services. (There are indications within the case study of how to allocate the time on the presumption that one hour is available in total, but the times may be adjusted proportionately for a different overall length.)

Before the activity starts obtain and look through the annual report and accounts of a hospital trust and a regional health authority, looking for discussion of the budgetary process and the way in which budgets are presented in the annual report.

Half of the group should form the budget committee, deciding among themselves the role of each individual within the hospital but having regard to the need to keep a balance between medical services, medical support staff and administration. The other half of the group should take the role of specialty team leaders presenting their budgets (‘specialty’ being the term used to describe one particular specialist aspect of hospital treatment, e.g. children’s specialisms [paediatrics], women’s conditions [obstetrics and gynaecology], or dealing with older persons [geriatrics]).

Initially the group should work together for 20 minutes to write a mission statement and set of corporate objectives. The budget committee should then hold a separate meeting lasting 10 minutes to decide: 

(a). What questions they will ask of the specialty team leaders when they present their budget plans. 

(b). Where the sources of conflict are most likely to be found. In the meantime each specialty team leader should set out a brief statement of objectives for that specialty team and a note of the main line items which would appear in the budget, indicating where conflict with other teams within the hospital is most likely to arise as a result of the budgeting process.

The budget committee should then interview each specialty manager (5 minutes each), with the other specialty managers attending as observers. After all interviews have been held, the budget committee should prepare a brief report dealing with the effectiveness and limitations of the budgetary process as experienced in the exercise. The specialty managers should work together to produce a report on their perceptions of the effectiveness and limitations of the budgetary process (15 minutes).