Financial Control and Budgeting

FINANCIAL CONTROL AND
BUDGETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
QUESTION 1 ..................................................................................................................................1
a)Critically analyzing the legal, financial and regulatory environment of health and social care
......................................................................................................................................................1
b)Evaluating the funding options ................................................................................................2
c) Discussing the agency theory and importance of communicating budget in context of
budgeting .....................................................................................................................................4
QUESTION- 2.................................................................................................................................5
a) Impact of financial constraints, cost and budgets on health and social care managers, clients
and stakeholders...........................................................................................................................5
b) Challenges of budgeting in the public sector organizations....................................................6
c) Advantages and disadvantages of the incremental and zero based budgeting........................7
QUESTION- 3.................................................................................................................................9
a) Calculation of the break-even point and margin of safety.......................................................9
b) Assumptions of the break-even model..................................................................................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Budgetary control is the technique of financial management that can be used by the
business in order to forecast the future operational level of activities, costs of operations,
expenses, profitability and requirement of the various financial and non financial resources in the
business. It is a crucial part of effective management which heps in monitoring and control of the
business affairs such that optimum utilization of resources is undertaken to fulfil the
organizational objectives. The current project shall be made in context of health and social care
sector analysing about factor in the business environment like legal, financial, regulatory which
are impacting the operations of company. Further it shall also be discussing about the various
funding options available and the agency theory to foster communication with the stakeholders
in the business. Apart from that it shall also consider budgeting in the health and social care
sector generating several challenges and financial constraints and associated benefits that can be
assumed with the help zero based budgeting.
MAIN BODY
QUESTION 1
Critically analyzing the legal, financial and regulatory environment of health and social care
Legal Environment
UK legal policy frameworks sets the framework and standards for the concerned people
to carry the practices of health and social care in fair manner. This type of actions help in
protecting interest of service users, patients and public involved in particular sector through
establishing appropriate and ethical approaches for mitigating related risk. Health & safety at the
work act, manual handling operations regulations, control of substances hazardous, etc are some
of the laws that have been enacted by government of country to ensure that all involved firm are
practicing in positive manner (Chawla and et.al., 2017). The legal framework has been
established to ensure that all hospitals and related clinics are working properly through
maintaining the cleanliness, hygiene, etc precautions according to the standards for providing
qualitative services. National assistance, social work, NGS & community, human rights, etc are
some the act that has been implemented to assure doctors, nurses and other related people with
these practices are practicing properly.
Regulatory Environment
Health and safety is one of the most critical and sensitive sector of society so giving
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emphasis on it effective becomes essential for regulatory bodies. Health research authority, Care
Quality Commission (CQC), General medical council (GMC), Nursing and midwifery council
NMC, GDC, HCPC, SCW, HIS, MWC, CIW, HIW, MHRA, SHI, etc are some of the regulatory
bodies who have important role of ensuring that professional standards are maintained. In
addition to this, it aids in providing clarification of duties and roles of health and social care
providers through giving guidance regarding internal and external issues and rights so that better
action can be taken for safeguarding & protecting interest (Costa and et.al., 2017). Quality of
care while providing solutions to patients, service users, etc is main objective of executing
various type of regulatory bodies in UK. Absence of these authority can create in inadequate
arrangements resulting into risk to health & safety therefore control, monitoring and maintenance
becomes essential.
Financial Environment
It becomes essential for the government to maintain proper efficiency in providing
funding to this sector and required people in safeguarding interest. The sources that provides
financing are NHS, GP, GPFHs, NICs, etc. are various forms of institutions. This becomes
crucial for government to pay attention on involved actives and way of conducting its so that
assistance in meeting standards through providing required resources can be exerted (Pandya-
Wood Barron and Elliott, 2017). The main platform for obtaining the funding is central grants
which aids in deriving sustainable growth and development via adopting tools and techniques for
meeting changing requirements. Local councils as well contribute in gaining objective and goal
of health & social acre sector through giving financial assistance.
Evaluating the funding options
Private finance initiative
It is one of the crucial way of financing the public sectors through private. The health and
social care is one the most important industry which requires to be developed with changing
circumstances so that better opportunity for growth can be grabbed (Matsoso, Nyathi and
Nakpodia, 2021). In addition to this, getting assistance from probate organizations for continuing
the operations of hospitals and social care firms. Implementing this financing source can enable
industry to have more chances to adopt technological as well other factors to derive ability to
optimize available resources in order to provide quality services. It helps government in reducing
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