Published: 22/04/2002, Volume II4, No. 5902 Page 37 38 39

The NHS has designed a new budgeting project in an attempt to track around£70bn of expenditure. Andrew Clapperton reports

'What are we truly getting for our money?' This question has been at the heart of debates surrounding NHS funding over recent years, and the insight due to be delivered by the programme budgeting project should be instrumental in providing the answers.

Programme budgeting is not a new concept. What is new is its application within the NHS, where it will be used to map approximately£70bn of primary care trust and strategic health authority-controlled NHS expenditure across 23 programmes of care.

This brings with it two immediate benefits not previously available to ministers, health commissioners and clinicians. First, it will be the most inclusive analysis of health expenditure produced to date (including both primary and secondary care activity).

Second, it looks along the axis of medical conditions (such as cancer and diabetes) rather than the traditional approach of totalling expenditure by categories (salaries, drugs, equipment etc).

By combining these two benefits, programme budgeting will provide health commissioners at all levels with the ability to link health outcomes with investment levels, and to make valuable comparisons by geographical area and, eventually, age. Obviously, such gains will not materialise immediately and will only be possible if the process of creating programme budgeting submissions is carried out consistently by all parties and with the help of the wider health community.

Preparations are continuing within the service, moving towards the first official submissions on 2003-04 accounts by PCTs and SHAs by 13 August.

Piloting within three PCTs was completed in September 2003 (see 'Rural pocket', pages 38-39). Their experiences, combined with wideranging inputs from the national programme budgeting board and other bodies, shaped the year-one guidance manual.

What has followed is the establishment of a Programme Budgeting SHA Leads network (off the back of the already established reference costs leads), to share best practice and act as a conduit for implementing the process. Each SHA is currently preparing all providers and PCTs on their patch for what is predominantly a technically focused/accounts-based firstyear submission.

Detailed preparations are down to local discretion, but it is strongly recommended that SHAs undertake a dry run of the whole process involving as many of their local PCTs and providers as possible. As a minimum, the SHA needs to ensure that all its local organisations are aware of and committed to their responsibilities and that appropriate training is in place.

Of course, the work does not end with submission on 13 August. If the real benefits of programme budgeting are to be felt within the service, processes need to be refined beyond year one and the scope of involvement progressively increased beyond expenditure need to be better mapped across the 23 categories.

It is not acceptable to have such large cost elements classed as 'other'. Work is already ongoing in this respect, and revised guidance will be released in readiness for future submissions.

Despite all the teething issues, it is clear that positive change can be achieved if the results from programme budgeting submissions are used by all parties (finance, planning, commissioning and clinicians) to inform health provisioning decisions.

'Instant fixes' are not the aim of the initiative, but over time a more informed service should be better positioned to make investment decisions that ultimately benefit the patient. This is the prize to work toward. l When can programme budgeting outcomes be expected to inform the service?

Dr Hugh Sanderson, consultant in public health and information lead, Central South Coast cancer network, who has been actively involved in the programme budgeting project, believes it will take time for the full benefits of programme budgeting to be realised.

When the first results of programme budgeting are published, there will be considerable debate about the accuracy of the figures and it will be difficult for primary care trusts to interpret the results. As a consequence, I expect relatively little impact on commissioning arrangements in 2005-06.

However, over the subsequent year, the quality and consistency of the data should greatly improve and consequently PCTs will be better placed to use the information to influence the way they commission.

One of the main areas where change can be expected is in relation to the variation in hospitalisation rates by condition. It has never been clear if these are due to variations in the morbidity of the population or differences in clinical behaviour, but this distinction is crucial for the proper commissioning of services.

Programme budgeting will enable PCTs to take their own data and consider whether any variations in spend (especially where matched by variations in use) are legitimately caused by variations in the epidemiology of the population; are due to differences in the balance of spend between primary and secondary care; or are due to differences in resources and clinical behaviour.

This should result in discussions about whether resources and activity should be raised or lowered for certain conditions in order to achieve greater equity of care. The effect of programme budgeting information on the 2006 local development plan will probably still be small, as this will be a new approach for PCTs.

However, over the next three to five years it will become possible to provide increasingly more accurate programme budget costs, especially in primary and community care, broken down by more specific conditions.

At that point, rational commissioning to reduce the variations in availability of care will become significantly easier.

Andrew Clapperton is programme budgeting head at the DoH.

Further information

Programme budgeting publications www. dh. gov. uk/PolicyAndGuidance/ OrganisationPolicy/FinanceAndPlanning/fs/en then look for the national programme budget project link.