Costing in the Newcastle Infirmary, 1840-1888

Abstract

Purpose – This paper examines the nature and function of cost accounting at the Newcastle Infirmary, a large voluntary provincial hospital, established in 1751. In particular, the paper adds to the literature on accounting within early voluntary hospitals by identifying the relative contributions of the costing system to planning and controlling the operations, assisting decision making and holding managers accountable for their performance. Design/methodology/approach – The paper relies primarily on original documents preserved in the archives of the Newcastle Infirmary. Findings – Although evidence was found of quite sophisticated costing systems, the findings suggest that the majority of the information was produced ex post by the hospital management to demonstrate good stewardship and to engender financial support. Research limitations/implications – More cases are needed of other hospitals to ascertain how typical the Newcastle Infirmary was of the voluntary hospital sector in the nineteenth century. Originality/value – Although there are other studies of accounting within British voluntary hospitals, and studies of the use of accounting to drive decision making in profit-making organisations during the nineteenth century, none have investigated the use of accounting as a decision-making tool in a voluntary hospital.