Details of £3.8bn integration fund revealed

Councils, CCGs and health and wellbeing boards will have to agree a detailed plan for joint working by February 2014 – but will face a “review of readiness” next month, it emerged yesterday.

They appeared in a letter sent to council chief executives from Local Government Association chief executive Carolyn Downs and NHS England policy director Bill McCarthy which was seen by HSJ’s sister title Local Government Chronicle.

The letter says the £1bn portion of the fund that is tied to performance will be awarded in two waves, the first of which will be at the beginning of 2015-16.

The award of this first sum will be based partly on performance in 2014-15 and partly on the submission of a plan for integration that meets national conditions by April 2014, the letter says.

Each area’s second payment will be awarded in the second half of 2015-16, and this could be done on the basis of performance in that year. However, the government, LGA and NHS England are “still agreeing the detail of how this will work”.

The rest of the money will be handed to local areas using a distribution formula, which “will be subject to ministerial decisions in the coming weeks”.

The letter also outlines plans for a model based on sector-led improvement for local areas that are not meeting their targets for integration – but warns that organisations could lose their commissioning responsibilities if outcomes are not achieved.

“In the event that the agreed levels of performance are not achieved, there will be a process of peer review, facilitated by NHS England and the LGA, to avoid large financial penalties which could impact on the quality of service provided to local people,” the letter says.

“The funding will remain allocated for the benefit of local patients and residents and the arrangements for commissioning services will be reconsidered.”

A template for local areas to outline their proposals for integrated care, issued alongside the letter, said that if planned improvements were not achieved, a section of the £3.8bn “may need to be used to alleviate the pressure on other services”. It asks for a backup plan to maintain services if improvements do not materialise.

The funding will not formally sit with local authorities, as was indicated by NHS England earlier this year, but will be held in “pooled budgets under joint governance between CCGs and local authorities”.

The letter warns that, because the £3.8bn is “already committed to existing core activity”, councils and CCGs will have to cut some services in order to use the money. It says it will be “essential” that health and wellbeing boards understand “the implications for local providers” and agree to “the service change consequences”.

“The fund does not in itself address the financial pressures faced by local authorities and CCGs in 2015-16, which remain very challenging,” it says.

It also says each region will have a lead local authority chief executive who will be tasked with finding ways for health and wellbeing boards to “support one another and work collaboratively”.