The government double counts its chickens
There were two ways of looking at the plan, announced by George Osborne last week, to more than treble the amount of NHS funding transferred to social care in 2015-16.
For health secretary Jeremy Hunt, the decision to create a £3.8bn pooled fund for the health service and local authorities to jointly commission integrated services was a “huge moment in the NHS’s history”.
For readers posting comments on hsj.co.uk, it was historic largely as a hefty proposed cut in NHS funding. Is that fair?
‘In short, the £3.8bn fund (or most of it) is included in health’s budget and local government’s spending’
According to the 2013 spending review document, health spending will rise to £110.4bn in 2015-16, a real terms increase of 0.1 per cent. It doesn’t take a calculator to establish that if you take more than £3bn out of that, health spending is getting a cut.
So the question of whether it is a cut or not depends on where that £3.8bn fund actually sits − with health or with local government?
Unhelpfully, the spending review document suggests the answer to that question is kind of “both”. The document says the local government budget is set to fall by 10 per cent in real terms in 2015-16, from £25.6bn to £23.5bn.
However, it adds that the real terms cut to local government spending will be just 2.3 per cent, from £54.8bn to £54.5bn.
‘The Treasury would no doubt argue that local authorities can’t do whatever they want with the money’
HSJ understands the £54.5bn figure includes the proposed transfer of NHS funding to social care. So, in short, the £3.8bn fund (or most of it) is included in health’s budget and local government’s spending.
The uncharitable term accountants might use for this approach is “double counting”.
In response, the Treasury would no doubt argue that local authorities can’t do whatever they want with the money: plans must be signed off by clinical commissioning groups and the Department of Health.
But that doesn’t change the fact that the £3.8bn is just one pot of money, with about £2.3bn of it apparently coming from funds that would otherwise be spent by CCGs.
From the health service’s point of view, that transfer can only be justified if it actually results in the promised reduction in pressure on acute services.
So to go back to those two different ways of looking at this plan: on the one hand, both the government and the opposition are finally committed to staking real money on integrated care; on the other, we’d better hope it works.