Better care fund cash will be used to compensate acute hospitals when local integration initiatives fail to reduce emergency admissions, the Department of Health has announced.

This modification was set out this week by the DH and the Department for Communities and Local Government following a ministerial pledge last month that an element of “risk sharing” would be incorporated into the initiative.

The plan follows widespread fears from NHS providers that they would be placed at financial risk if the integration project did not lead to lower hospital admissions. NHS England is also said to be worried about ensuring local better care fund plans are financially sound.

Under the fund, £3.8bn will be placed under the joint governance of clinical commissioning groups and local councils. Of that sum, £1.9bn of it will come from a new topslice of local CCG commissioning budgets.

The new arrangement will ensure £1bn of this remains within the NHS, and will depend upon performance against a planned cut to accident and emergency admissions. In each area a set amount of the fund will be initially held back, based on the value of savings that are planned to be generated through reduced emergency activity.

Local targets to cut A&E activity will be agreed by councils, CCGs and NHS England area teams.

The DH has not set a firm national target, but HSJ understands the minimum expectation will be a 3.5 per cent cut in A&E admissions in 2015-16. If achieved, this would equate to savings nationally worth £400m.

Under this scenario, if plans are successful and savings are achieved through falling A&E activity, the money will be released to be spent on integrated care as they deem appropriate. If A&E activity does not reduce, the money held back will be used to pay for it. The remainder of the £1bn not dependent on A&E activity will also have to be spent within the NHS on non-acute services.

Older woman and younger woman, nurse, smiling at each other

The move is intended to help ensure more joined up community health and care services ‘for some of our most vulnerable citizens’

If every area set a target of 3.5 per cent reduction in A&E, that would leave £600m to be spent within the NHS.

The changes represent an evolution of the performance-related element of the fund originally set out by ministers, which would have seen some of the funding held back if local areas failed to demonstrate improvement on a range of performance measures. That regime was scrapped last winter when ministers decided it would be “inappropriate” to take money away from areas struggling to make improvements. The new arrangements ensure that there are no financial penalties, but will direct the money to hospitals where necessary.

Richard Humphries, assistant director for policy at the King’s Fund said: “This announcement is a sign of growing anxieties within government as the NHS heads towards a financial crunch in 2015-16.

“The better care fund is well intentioned but with no new funding, it is papering over the cracks of deteriorating NHS finances and social care budget cuts.”

He added that the changes will ease fears among NHS providers, but will add to the strain on councils.

“Sticking plaster solutions will not deal with the significant challenges facing social care, nor will they address the growing funding pressures facing the NHS.

Unless significant additional money is found, patients and service-users will bear the cost as services are cut and quality of care deteriorates.”

The DH has also said today that 80 per cent of better care fund plans were on target to significantly improve local services through integrated care.

The local better care fund plans are still being assured. However, 14 have been identified as being “fast tracked” for more rapid development, so they can act as examples to everywhere else. These are:

  • Dudley
  • Hammersmith and Fulham
  • Kensington and Chelsea
  • Westminster
  • Greenwich
  • Leeds
  • Liverpool
  • Nottinghamshire
  • Reading
  • Sunderland
  • Rotherham
  • Torbay
  • Warwickshire
  • Wiltshire

Health secretary Jeremy Hunt said: “Local authorities and the NHS are making excellent progress in developing plans that will give patients better, joined up care and allow hospitals to focus on treating the people who really need to be there. The plans are packed full of ideas and show that strong partnerships are being forged with different teams like never before.

“Successive governments have talked about bringing the NHS and social care together for decades – this is the first, transformative step to making that a reality.

“We will continue to nurture and support the development of these plans to deliver our shared ambition so that every part of the country provides better care for patients closer to home.”    

Simon Stevens, chief executive of NHS England, said: “This marks an important step in ensuring more joined up community health and care services for some of our most vulnerable citizens, and we will now be working closely with our partners in local government and the local NHS and many others to ensure the rigour of the local planning matches the scale of the transformation we all want to see. The NHS will widely welcome this collaborative approach.”

The Foundation Trust Network welcomed the changes, but chief executive Chris Hopson added: “Significant risk still remains. Local areas are being asked to plan for a 3.5 per cent reduction in emergency admissions in 2015-16  when last winter, the mildest in a century, admissions rose by 4 per cent and trusts are reporting similar, if not greater, increases for the first quarter of 2014-15.

“We have less than 300 days to put the new patterns of care in place to deliver these reductions. Whilst some plans have been produced in collaboration with providers, many of our members also tell us that they are still not fully involved in this planning process.”

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