Councils will be allowed to use some of the government’s £3.8bn integrated care fund to protect existing social care services rather than fund service transformation, according to new guidance.

NHS England and the Local Government Association have today published a joint statement setting out how the integration and transformation fund is to be managed.

Although the £3.8bn fund is supposed to be a pooled health and social care budget, the document acknowledge that some of it will have to be used to protect social care as council budgets are slashed.

Under the heading of “protecting social care”, the organisations say: “Flexibility must be retained to allow for some of the fund to be used to offset the impact of the funding reductions overall,” the document says.

HSJ’s sister title Local Government Chronicle has reported that councils have used previous funding transfers from the NHS for this purpose, although some came in for criticism from Department of Health director-general for social care Jon Rouse. He told LGC in May that they had taken it too far by diverting care funds to other services.

There remains ambiguity over whether clinical commissioning groups or health and wellbeing boards will hold the budget. Today’s statement says: “Health and wellbeing boards will sign off the plans, which will have been agreed between the local authority and CCGs.”

It has also emerged that CCGs will have to draw up two-year service integration plans by the end of the current financial year.

The document says: “Whilst the [fund] does not come into full effect until 2015-16 we think it is essential that CCGs and local authorities build momentum in 2014-15.”

Funding dedicated to the integration of health and social care will increase by £200m to £1bn in 2014-15.

“In effect there will need to be two-year plans for 2014-15 and 2015-16, which must be in place by March 2014.

“To this end we would encourage local discussions about the use of the fund to start now in preparation for more detailed planning in the autumn and winter.”

The joint statement goes on to say that there is an “excellent opportunity” to align the integration fund with NHS England’s strategy, set out earlier this year in the document The NHS Belongs to the People: A Call to Action.

Of the £3.8bn fund, £1bn will be performance related. Half will be paid out on 1 April 2015, which is expected to be based on performance in the 2014-15. The rest will be paid in the second half of 2015-16, and could be based on in-year performance. Performance will be judged against a combination of nationally-agreed and locally-agreed indicators.

Foundation Trust Network chief executive Chris Hopson told HSJ that, while there was a strong case for investing in integrated care, the NHS would not benefit if money was taken out of the NHS frontline before improvements to preventative care had taken effect. If the fund is “simply used to cover a funding gap on the social care side, all that will happen is there will be less funding for the NHS to do the same as it currently does, or more.”

The integration fund “has made a lot of people in the NHS very nervous”, he said. “There’s a clear arm wrestle going on and NHS England are doing all they can to make sure the NHS is not irreperably harmed by it.”

Mr Hopson added: “Very few of our members are engaged with their health and wellbeing boards. If they have the whip hand, that automatically puts a bias on the social care side of the house, rather than the NHS side.”