COMMONS

Planning for the Better Care Fund report published

26 February 2015

In future spending discussions, departments and the Treasury should unambiguously define service and savings requirements, and ensure they are clearly, consistently and transparently presented to all parties according to the Public Accounts Committee report published today, 26 February.

Chair's comments

"The Better Care Fund is meant to transform local health and social care services by pooling resources.

However, with the redesign of the Fund after April 2014, the priority has shifted from improving local services through integration to protecting NHS resources. It appears to the Committee that NHS spending was judged a higher priority than supporting adult social care.

The initial planning for the Fund was deeply flawed. Whilst NHS England and the Department of Health worked on a planning assumption that the Fund would secure £1 billion in financial savings for the NHS, the Department for Communities and Local Government had not worked on the basis of a required savings target.

The failure to be clear with local areas about the expected savings severely undermined the initial planning process. When local plans were stress tested, savings of just £55 million were identified – nowhere near £1 billion.

With the arrival of NHS England’s new chief executive in April 2014 came the stimulus for the pause and redesign of the Fund, leading to the requirement that £1 billion be protected for the NHS.

As a result, all 151 health and wellbeing boards had to submit revised plans, resulting in wasted time, effort and money. The latest plans suggest that local areas expect to pool £5.3 billion and save £532 million in 2015–16.

We are not convinced that it is possible to reduce emergency admissions and to deliver £532 million of savings in 2015–16, as the scale of the challenge in reversing the long-term upward trends in emergency admissions and delayed discharges is significant.

The Local Government Association considered that the redesigned scheme moved the integration agenda backwards and not forwards, and it told us that local government had contemplated walking away from the Fund. Local areas are now at greater risk of not being able to implement the policy.

It is not yet clear how all local authorities will protect adult social care services to the extent intended. At the time of the hearing, fourteen local plans presented serious concerns with regard to the protection of adult social care in those areas.

Demographic changes mean demand for adult social care services is increasing at a time when available resources are shrinking, and the scale of the challenge facing local government and the NHS is growing as demand for health and care services increases.

All the agencies involved need to rise to this challenge as failure, particularly for older and disabled people, is not an option. The Departments should publish an annual scorecard to demonstrate the extent to which the Fund is supporting integration, maintaining adult social care, reducing emergency admissions and saving money."

Margaret Hodge was speaking as the Committee published its 37th Report of this Session which – on the basis of evidence from Carolyn Downs, Chief Executive, Local Government Association, Helen Edwards, Director General for Localism, Department for Communities and Local Government, Sir Bob Kerslake, Permanent Secretary, DCLG, Una O'Brien, Permanent Secretary, Department of Health, Andrew Ridley, Better Care Fund Programme Director, Jon Rouse, Director General, Social Care, Local Government and Care Partnerships, Department of Health and Simon Stevens, Chief Executive, NHS England – examined Planning for the Better Care Fund.

£1 billion savings needed

The £5.3 billion Better Care Fund was introduced as an opportunity to transform local health and social care services by pooling resources to stimulate closer joint working and innovation for the benefit of local populations and the taxpayer. The initial planning for the Fund was deeply flawed. The Department of Health and the Department for Communities and Local Government (the Departments) and NHS England changed the rules in the middle of the planning phase, after failing to tell planners they needed to identify £1 billion in savings.

As a result, all 151 health and wellbeing boards had to submit revised plans resulting in wasted time, effort and money. Local areas are now at greater risk of not being able to implement the policy. The scale of the challenge facing local government and the NHS is growing as demand for health and care services increases. We are concerned that the new focus on reducing emergency admissions and making savings will significantly increase pressure in adult social care services.

£55 million of savings identified

The Better Care Fund aims to deliver better, more joined-up local services to older and disabled people to care for them in the community, keep them out of hospital and avoid long hospital stays. Initially the Departments and NHS England expected savings to come to the NHS from this initiative. However when local plans were stress tested savings of £55 million were identified against an initial expectation of £1 billion. The Departments and NHS England redesigned the Fund and asked local areas to submit revised plans in September 2014.

 The latest plans suggest that local areas expect to pool £5.3 billion and save £532 million in 2015–16.

Conclusions and Recommendations

Initially, the central government bodies involved in planning the Fund lacked a clear and shared understanding of its financial objectives. The Departments, NHS England and the Local Government Association had different expectations from the Fund. While all parties intended the Fund to improve local services through innovation, NHS England and the Department of Health worked on a planning assumption that the Fund would secure £1 billion in financial savings for the NHS. However, the Treasury and Departments did not agree the savings expectation as a formal target for the Fund and the Department for Communities and Local Government had not worked on the basis of a required savings target.

The witnesses were unclear how imperative the £1 billion savings expectation was during the early stages of the Fund. The work prompted by the arrival of NHS England’s new chief executive in April 2014 was the stimulus for the pause and redesign of the Fund, leading to the requirement that £1 billion be protected for the NHS. So the priority has shifted from improving local services through integration to protecting NHS resources. Some £253 million of the NHS contribution to the fund will only be made available if the expected savings from reducing emergency admissions to hospital are achieved.

Recommendation: In future spending discussions, departments and the Treasury should unambiguously define service and savings requirements, and ensure they are clearly, consistently and transparently presented to all parties.

The failure to be clear with local areas about the expected savings severely undermined the initial planning process. The Departments and NHS England did not tell local areas in the initial planning phase that the Fund should lead to £1 billion of savings in 2015–16. The NHS England and Local Government Association teams that assessed local plans for the Fund were also not aware of the need to meet the savings expectation and, as a result, considered that 90% of the plans were ready for ministerial approval.

However, when NHS England subsequently tested the expected savings it concluded that it had confidence in only £55 million of savings, rather than the £731 million promised in the plans. As a result, the plans were not approved, planning was paused for three months while the programme was redesigned and local bodies were required to submit revised plans.

Recommendation: When overseeing local implementation of complex and important reforms, the Departments should ensure that they clearly communicate their objectives to those responsible for delivery.

It was understandable given the pressures on the NHS budget to pause for three months to redesign the Fund, but the changes and delay eroded goodwill and put delivery of the Fund’s objectives at risk. More transparent and rigorous planning by the Departments and NHS England at an earlier stage should have occurred. All local areas had to resubmit plans after the Departments redesigned the scheme in July 2014 which halved the time available to them to prepare for the Fund.

The Better Care Fund will not be a success without the active support of local government. The Local Government Association considered that the redesigned scheme moved the integration agenda backwards and not forwards and it told us that local government had contemplated walking away from the Fund.

Recommendation: The Departments should identify all constraints on programmes from the outset and ensure that mitigating those constraints does not undermine timely planning and the successful achievement of objectives.

The confused accountability at national and local levels has hindered the development of the Fund. The Departments devolved delivery responsibilities to a local level to encourage innovation without resolving accountabilities for overseeing, delivering and monitoring the Fund. Initially, the Fund’s senior responsible owners were the policy holders from the Department of Health and the Department for Communities and Local Government.

The current Senior Responsible Owner for delivery of the Fund, who is from NHS England, was not appointed to the role until July 2014 and is still accountable to the departmental policy owners. At local level, health and wellbeing boards approved local plans for the Fund, but they could not implement plans without ministerial approval. It is not yet clear who is responsible for performance management of the Fund once it starts.

Recommendation: The Departments should set out, in a joint accountability system statement, the specific responsibilities and accountabilities for the Fund of all local and national partners, including for plan approvals, delivery and value for money.

It is not yet clear how all local authorities will protect adult social care services to the extent intended. A primary objective of the Fund was to protect the provision of adult social care services locally. Demographic changes mean demand for adult social care services is increasing at a time when available resources are shrinking.

Many local authorities are already reducing spending on social care as their budgets become constrained. Until NHS England’s intervention in April 2014, local authorities expected to have unrestricted access to a pooled budget which was around £1 billion larger than it was after the reset. It appears to the Committee that NHS spending was judged a higher priority than supporting adult social care, and 14 local plans still present serious concerns with regard to the protection of adult social care in those areas. It appears likely that the Fund will not, therefore, support adult social services to the extent originally anticipated.

Recommendation: The Departments should write to the Committee at the end of February 2015 setting out whether they have resolved the outstanding issues in areas without fully approved plans, and how they will deal with any areas which have not met the national condition to demonstrate how they will protect adult social care services.

We are not convinced that it is possible to reduce emergency admissions and deliver £532 million of savings in 2015–16. Emergency admissions have increased by 4.9% for the first three quarters of 2014–15 compared with the same period in 2013–14 and delayed discharges have also increased. The scale of the challenge in reversing the long-term upward trends in emergency admissions and delayed discharges is significant.

Recent changes to the NHS tariff mean there is now less financial incentive for acute trusts to reduce emergency admissions than previously. Furthermore, there has been minimal pump-priming investment to support the development of new, community based services which are essential if future savings are to be secured.

Recommendation: The Departments should publish an annual scorecard to demonstrate the extent to which the Fund is supporting integration, maintaining adult social care, reducing emergency admissions and saving money.

Further information

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