Approved Costing Guidance

The Approved Costing Guidance forms a co-ordinated approach to patient-level costing (known as PLICS) and the mandated National Cost Collection. It also supports the Costing Assurance Programme.


What is the Approved Costing Guidance?

The Approved Costing Guidance (ACG) comprises the documentation and tools to be used by providers of NHS services for submitting National Cost Collection data to create a Costing Transformation Programme (CTP) compliant model.

The documentation is brought together by collection year and there is a transition pathway for implementation which shows the proposed trajectory to full compliance with costing standards and all ‘in scope’ services in the PLICS National Cost Collection (NCC).

The guidance also provides the framework on which the Costing Assurance Programme will be based.

Reference costs used to be mandatory for all providers of NHS services. This has now been replaced with a hybrid of patient-level cost and aggregate cost collection as the Costing Transformation Programme transitions to a full patient-level collection over the next few years.

Approved Costing Guidance 2021

This year we have streamlined all the guidance into a single set of documents that are published prior to the first month of the financial year to which they relate. All of the documentation for all sectors can be found on the page Approved Costing Guidance 2021: Guidance and Tools.

Self-help learning extensions and tools

In addition to prescribed guidance and tools we have produced a series of non-mandated self-help guidance and tools to support new and existing practitioners to develop costing in their organisations. The learning extensions are additional documents to help inexperienced practitioners by providing further detail and examples. All of the additional guidance can be found at the page Self-help learning extensions and tools.

COVID-19 Costing Recommendations

There have been significant national changes to operational and clinical practices as a result of the COVID-19 pandemic. In response to this in March 2021 NHS England and NHS Improvement published the document National Cost Collection 2021 COVID-19 Recommendations as part of the 2021 Approved Costing Guidance. It updates recommendations issued in 2020 and should be used for the National Cost Collection return for the 2020/21 financial year.

Unlike last year, we are collecting the vast majority of costs relating to COVID-19 for providers’ own patient care, to improve understanding of the impact of the pandemic on COVID-19 related and non-COVID-19 related care. This document shows the areas where the costing standards can be amended for the financial year 2020/21 in light of the impact of the COVID-19 pandemic on NHS services. It also contains additional collection guidance related to specific COVID-19 services.

Mandating patient-level costing for NHS community services

Between December 2020 and January 2021, NHS England and NHS Improvement consulted on proposals to mandate NHS Foundation Trusts and NHS Trusts to record and report the costs of community services activity at a patient level. Under the proposal all relevant activity would be costed at patient-level from the beginning of the 2021/22 financial year, with the first collection in 2022, and to stop collecting reference costs after the financial year 2020/21.

As of March 2021 the report detailing the response to that consultation has been published and can be found on the page Mandating patient-level costing for NHS community services along with the consultation document and the accompanying Impact Assessment.

Other resources