Costing transformation programme

The costing transformation programme aims to improve the quality and use of costing information in the NHS, with patient-level costing and a single, national annual cost collection.

From 1 April 2016, Monitor is part of NHS Improvement. Find the latest information about this programme on NHS Improvement’s website.


Over 5 years, Monitor will develop and mandate a new costing standard for all providers of NHS funded acute, mental health, community and ambulance services in England. The costing standard will be mandated subject to an impact assessment - see our programme milestones. timeline (PDF, 187KB, 1 page).

This costing transformation programme was informed by feedback we received to our consultation ‘Improving the costing of NHS services: proposals for 2015 to 2021’.

We continue to progress with input form the sector through the Costing Advisory Group. Find out more about the group.

Why transform costing?

Lord Carter’s review of efficiency in hospitals identified a ‘huge inconsistency in costing approaches…across the NHS’ and noted that Monitor’s costing transformation programme will help to address these inconsistencies.

Monitor had identified a need to improve the quality of costing information in the NHS to inform the payment system and to support the sustainable delivery of high quality patient care as outlined in the Five Year Forward View. Better information will enable healthcare providers to:

  • make the best possible use of their resources
  • evaluate clinical practice
  • support better ways of working

Programme workstreams

The programme has 4 main workstreams to transform costing:

Patient-level costing: the case for change

This workstream aims to establish the case for investment in costing processes and infrastructure.

The case for change will include case studies from providers, and information on how patient-level costing information can:

  • inform service design
  • support improved patient care
  • support provider efficiency

We plan to publish this document in April 2016.

Costing software minimum requirements

This workstream aims to establish the minimum requirements for costing software.

The minimum requirements will help:

  • costing practitioners when procuring and implementing costing software and reviewing software updates
  • software suppliers to develop their software

We published a consultation on a set of draft minimum software requirements to inform the development of the final minimum software requirements.

We plan to publish the final requirements in April 2016.

Costing standards

This workstream will develop a new costing standard. The final costing standard will include:

  • costing standard: detailed instructions on the costing process
  • costing guidance: explaining how to cost specific procedures and services by engaging with clinical and other colleagues
  • information requirements: descriptions of the activity information collected by organisations and how this can be used in the costing process
  • costing glossary: explaining technical terms
  • collection guidance: explaining the cost collection process

We plan to publish the first version of the costing standard in April 2016. This standard will only be implemented by our acute roadmap partners in 2016.

Developing the costing standard together

Our acute road map partners are:

  • Buckinghamshire Healthcare NHS Trust
  • Guy’s and St Thomas’ NHS Foundation Trust
  • The Royal Free London NHS Foundation Trust
  • The Royal Marsden NHS Foundation Trust
  • The Royal Orthopaedic Hospital NHS Foundation Trust
  • University Hospitals Birmingham NHS Foundation Trust

Our ambulance road map partners are:

  • London Ambulance Service NHS Trust
  • West Midlands Ambulance Service NHS Foundation Trust
  • Yorkshire Ambulance Service NHS Trust

Our mental health road map partners are:

  • West London Mental Health NHS Trust
  • Central and North West London NHS Foundation Trust
  • Oxford Health NHS Foundation Trust

Community health road map partners:

We’ll be recruiting community service road map partners to build future versions of the standards.

Cost collection

We will deliver the infrastructure for the collection, analysis and publication of patient-level costing information under the new costing standard.

There will be a single annual cost collection. We will:

  • define the costing software minimum requirements to conform to the Healthcare Costing Standards for England
  • develop a purchasing framework and accreditation of suppliers of PLICS software
  • develop the requirements for cost collection, analysis and publication during 2016
  • develop and deliver the IT systems and capabilities for cost collection, analysis and publication services
  • develop processes for mandating patient-level cost collection (starting with acute services in 2017)

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Published 17 June 2015
Last updated 11 March 2016 + show all updates
  1. Updated the programme's timeline.

  2. Information added about the costing software minimum requirements consultation.

  3. Updated page with news on the 'Value for money' publication, costing standards and PLICS software requirements.

  4. Updated the costing standards work stream with a list of documents we'll be producing. Added list of 'acute road map partners' who are supporting us with the costing standards work stream.

  5. First published.