The chancellor of the exchequer George Osborne has announced £3.8bn will be spent on jointly commissioned integrated health and social care in 2015-16.

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  • George Osborne more than triples the amount to be spent on integrated health and social care
  • Foundation Trust Network accuses government of “robbing Peter to pay Paul”
  • Jeremy Hunt: Increasing integration funding is a “game changer”
  • NHS admin budget slashed by more than a quarter

6.34pm HSJ has obtained a breakdown of the £3.8bn integration fund.

A letter sent out to CCG leaders today reads: “The NHS will contribute £3.4bn towards the integration fund. This compares to the £0.9bn the NHS currently transfers to support integration with social care.

The £3.8bn integration transformation fund will be a pooled fund, held by local authorities and funded from:

  • The £0.9bn of funding NHS England planned to transfer to fund social care in 2014-15;
  • An additional £0.2bn of investment in 2014-15 (to be agreed as part of mandate discussions for 2014-15 with DH);
  • DH and other Government Department transfers of £0.4bn (capital grants);
  • Reablement funding of £0.3bn;
  • Carers’ break funding of £0.1bn;
  • Core CCG funding of £1.9bn.

6.29pm More on the admin budget cut. Commissioning sector reporter David Williams tweets:

“DH insists admin cut is 10pc, not 25+. this is cos they expect to be spending £2.9bn on admin in 2014-15, way under the budgeted £3.7bn.

“…still amounts to a cut of v nearly half on NHS running costs between 2010-11 and 2015-16. Just most of the cut has already happened.

“DH says 10% cut is ‘stretching but achievable.’ i say will finish off some CCGs, CSUs and will require NHS England to rethink its structure.”

5.43pm: Every accident and emergency department will have “constant access to mental health professionals” according to the government’s spending review.

The document published today as part of George Osborne’s £11.5bn cuts to 2015-16 also sets out further investment in mental health services.

It does not reveal the value of the extra money but says: “Every accident and emergency department will have “constant access to mental health professionals” to ensure people with mental health problems get the best possible care.”

“This will benefit people with mental health problems, including those with disabilities.”

It also commits the government to bolstering the Improving Access to Psychological Therapies programme by 2015-16.

It adds: “The Government is also committed to ensuring that the NHS treats mental health as seriously as physical health, so in 2015-16 the NHS will expand access to talking therapies and improve its response to mental health crises.”

It said one commitment was “that more adults and young people have access to clinically proven psychological therapies.”

5.30pm NHS Clinical Commissioners, the representative group for clinical commissioning group, has issued their statement on the CSR. Interim chair Charles Alessi said: “The public, patients and their elected representatives need to be aware of the implications of today’s announcement. Given the pressures that public finances face, it is positive the Government have sought to protect NHS funding. We also welcome the Government’s announcement that additional funding will be directed to funding integrated care.

“However this is not new money and this means that from 2015 commissioners will have fewer resources to commission health services and that means less money for providers and less money for hospital beds

“Clinical Commissioning Groups are committed to delivering integrated care and looking beyond the NHS. CCGs across the country are focusing on developing integrated care programmes which deliver innovative solutions for their populations.

“In this new world it is incumbent on CCGs to take a leadership role in their areas. Integration needs new ways of working with CCGs working with their patients, local authorities and providers to deliver innovative solutions for their patients and populations.

“Many areas already face stretched budgets for healthcare and we should be striving to achieve different ways of working. To do this this requires local leadership and CCGs are best placed to fulfil that role.”


4.35pm More responses are rolling in. Get ready for a long one from the NHS Confederation and NHS Employers, addressing the main themes in turn.

Mike Farrar, chief executive of the NHS Confederation, said: “Although the health budget has been spared a reduction, it is important to remember that NHS organisations are facing significant pressures to meet growing demand and improve quality, and still need to find substantial efficiency savings.”

On the pooled budget for health and social care services, he added: “Social care budgets have really been squeezed over the past three years and this has had a big impact on the numbers of people we are seeing admitted to hospital as emergencies because the right support outside hospital is not available to them.

“This allocation should help address the need to join up services and provide the right care for people, allowing them stay in their own homes. But NHS organisations will want to have strong assurances that the money going to social care does the job it is meant to do. Rather than see local health and social care budgets as separate, we need to support integrated care by bringing together providers and commissioners to look at how we can spend our money to the best effect.

“To make a real improvement to the care people receive, we have to change the way we do things in the future, and ensure the NHS is able to provide care at the right time, in the right places. This settlement means NHS organisations will have less money available in real terms for front line services, so the need to change services is now more pressing than ever.”

On the financial settlement, Mr Farrar said: “Maintaining the ringfence for the NHS is vital, but it is important that the health service gets to spend what is allocated to it.

“Long-term investment and innovation in healthcare needs to be seen as a key part of the country’s growth strategy, not an anchor holding it down.”

On the need for political courage on the changes to the NHS in the run up to the general election, he said: “It is really important that the Government explains to the public what it thinks the implications of today’s announcement will be to our health services.

“This explanation needs to be looked at in the context of the long-term future of the health service and the impact that these decisions will have on local services.”

On the announcement about performance related pay, Dean Royles, chief executive of the NHS Employers organisation said: “Despite a headline pay freeze, most NHS staff have been receiving incremental pay increases of around three per cent as they climb up through their pay bands. That is why we recently agreed changes to the NHS pay scheme with trade unions.

“Employers want to do everything they can to support staff and build morale but our biggest priorities must be maintaining and improving quality patient care and staff job security, both of which depend on sustainable pay bills and a focus on performance.

“We need to engage with our staff and unions to explore how we can come out of a period of pay restraint in a sustainable way, recognising the significant contribution of our staff to delivering high quality patient care.”

3.58pm The adminstration budget cut follows severe reductions since 2010.

Here are the figures for the four financial years covered by the current CSR period:

2010-11: 5.1bn

2011-12: 4.5bn

2012-13: 4bn

2013-14: 3.7bn

2014-15: 3.7bn

Today’s further cut, to £2.7bn by 2015-16, brings the NHS administration budget to a little more than half the level it was at at the beginning of this parliament.

3.08pm The CSR document says the £3.8bn pooled budget for integration will include £350m of capital funding. This cash “will be available for projects to improve integration locally, including IT funding to facilitate securesharing of patient data between the NHS and local authorities, and to improve facilities for disabled people.”

3.05pm Here’s what the CSR document says about how the quality, innovation, productivity and prevention efficiency programme will be taken forward in 2015-16.

“Through the QIPP efficiency programme, [the NHS] is on course to deliver up to £20bn of savings by 2015. Working with local areas, NHS England will now lead further work, which is expected to focus on areas such as better procurement, making savings through improved use of technology, and reducing pressures on A&E by providing good alternatives and more support to older people and people with multiple long-term conditions.”

3.02pm The Department of Health’s capital budget will increase slightly in 2015-16, to £4.7bn from £4.6bn the year before.

2.57pm In non CSR news, health sector regulator Monitor has announced it is investigating whether Tees, Esk and Wear Valleys Foundation Trust has breached conditions of its licence.

The investigation follows the decision of the Care Quality Commission to issue the trust with a warning notice for failing to meet standards in respecting and involving people who use services.

Monitor’s investigation will examine whether those issues are indicative of governance problems at the trust.

The investigation is taking place under Monitor’s new provider licence regulatory regime which came into force on April 1st 2013.

Monitor will ask the trust to explain why they have experienced problems and what plans they have to address them.

2.46pm The Nuffield Trust has said that the financial outlook for the NHS is set to worsen if its leaders and staff fail to deliver change.

Chief economist Anita Charlesworth said: “Next month’s projections from the Office of Budget Responsibility are likely to conclude that the pressure on services such as health, pensions and long term care will continue to rise faster than tax receipts, even after the economy has recovered.

“Against this background the government faces choices at the next spending review in 2015 that are even tougher than those at present. By that point departmental spending on non ring fenced areas such as policing and local government would have fallen by a third. In the absence of major tax rises or a relaxation of the government’s borrowing targets it is difficult to see how the NHS could continue to be protected in such circumstances.

“To date the NHS has delivered its efficiency targets largely through strong central measures such as cutting administrative costs and holding down pay. These are short term fixes. The pace of change needs to increase in the NHS, with a greater focus on longer term transformation. Without such as shift we are storing up financial risk and NHS managers will find it harder and harder to match rising demand to a stagnant budget.”

2.35pm We’re starting to get responses to the CSR.

Here’s Chris Ham of the Kings Fund:

“While the NHS budget remains protected, it is under intense pressure. The additional cuts in local government funding announced today will add to this, as well as increasing the strain on social care services.

“With this in mind, we welcome the significant increase in funding transferred from the NHS to promote joint working between health and social care. Alongside the recent announcement that new pioneer areas will develop integrated care at scale and pace, this signals a much more ambitious approach to delivering integrated care and a real opportunity to improve the co-ordination of services for patients and service-users.

“The flip side is that this will increase the strain on the NHS at a time when many hospitals are already struggling to reduce costs and absorb reductions in the prices paid for their services. It will also add to pressures to reorganise hospital services - essential in any case to improve quality and increase financial sustainability.

“Looking to the future, there is a limit to how long a sticking plaster can be applied to a growing wound. It is time to ask whether the post-war settlement, which established separate systems for health and social care, remains fit for purpose. This is why we have set up a new Commission to explore whether the current settlement should be re-shaped, including the scope for developing a single funding system for the NHS and social care.” 

2.27pm The DH’s administration budget faces a cut of more than a quarter in 2015-16.

The CSR document says the health/NHS administration budget will fall from £3.7bn to £2.7bn between 2014-15 and 2015-16.

The government as a whole is only losing around £1.6bn in admin funding, meaning that the NHS is bearing well over half of the total cut.

2.20pm The Department’ of Health’s resource allocation for 2015-16 will be £111.7bn, up from an expected £109.6bn in 2014-15. That’s an uplift of 1.91 per cent.

2.19pm Here is the key passage in today’s CSR document:

“The Government is providing £3.8 billion, pooled between the NHS and local authorities, to support and reward integrated working in 2015-16, following the example of the Whole Place Community Budget pilots.

“The Government will also ensure that both local government and Clinical Commissioning Groups are given their funding allocations further in advance and are working towards the same outcomes, to encourage local services to work together.”

NHS commissioners will doubtless be interested to know how far in advance they will know their allocation.

2.10pm Some key lines from editor Alastair McLellan’s interview with Jeremy Hunt:

The integration funding will be allocated “according to need” to each of England’s 150 local authorities.

However to access the funds, clinical commissioning groups and health and wellbeing boards must bring forward “extremely ambitious” plans for sign off by health minister Norman Lamb and a member of the Communities and Local Government team.

The changes will bring about the first “accountable care organisations”, Mr Hunt said.

And, councils and health commissioners will have to “fully share data”. Mr Hunt said: “They will have to have a service where there is a single organisation responsible for the services an older person receives.”

2.05pm Before we start dissecting the CSR document, here’s an exclusive interview with health secretary Jeremy Hunt.

1.54pm Closer inspection of the spending round document reveals the government are actually giving councils and CCGs £3.8bn. More on this to follow…

1.39pm The Foundation Trust Network isn’t happy.

A statement just released says: “The FTN believes today’s Comprehensive Spending Review will lead to a further major squeeze on NHS front line services as £3bn is diverted from the NHS budget to social care in 2015/16. 

“NHS foundation trusts and trusts are, in many cases, struggling to meet the rapidly rising demand created by an ageing population, as the recent problems in A&E show. Better funding for social care will help, but not by raiding NHS budgets.”

FTN chief executive Chris Hopson said: “This CSR robs Peter to pay Paul and significantly increases risk for the NHS. We welcome investment in social care as a way of reducing demand on the NHS. But the NHS is already struggling to cope with the largest financial squeeze in its history. Unlike the rest of the public sector, we can’t degrade or cut services or reduce frontline staff and our demand is rising by 5 per cent a year. This is a major gamble that switching budgets to social care will solve the NHS’s problems and that the Service will somehow find ways of making up the funding gap.

“We have seen this approach before, with the 30 per cent emergency admission tariff where funds were switched from one part of the system to another in the hope that new services would follow to reduce pressure on hospitals.  The only result was that hospitals faced the same or growing demand with fewer resources.  The result was plain for all to see in last Winter’s A&E performance. We fear history repeating itself.

“£3 billion represents an average £12.5 million reduction off every local NHS Foundation Trust and Trust budget.”

1.35pm Health minister Norman Lamb and shadow health secretary Andy Burnham are having a minor spat on Twitter.

“Problem with Osborne’s attempt to steal Labour’s policy on health & care integration is his Govt has already legislated for fragmentation,” said Mr Burnham.

Mr Lamb replied: “To be fair, Andy, I have been arguing the case for integrated care for years!”

1.33pm The Treasury has put the spending round documents online.

Here’s the main document

This is the distributional analysis

This is the policy costings document

And here is the equalities impact assessment

1.28pm Here’s a full transcript of the section of George Osborne’s speech on the NHS:

“Many older people do not just use the NHS they also use the social care system, and if we’re honest they often fall between the cracks of the two systems, being pushed from pillar to post and not getting the care they should.

“None of us here would want that for their parents or grandparents, and in a compassionate society no one should endure it. It’s a failure that also costs us billions of pounds and Britain can do better.

“In the 2010 Spending Review we said the NHS would make available around £1bn a year to support the health needs of people in social care. It worked, and saved hundreds of millions in the process.

“Last year these improvements meant almost 50,000 fewer bed days were lost to the NHS. So today I can announce that I will be bringing together a significant chunk of the health and social care budgets. I want to make sure everyone gets a properly joined up service where they won’t have to worry if that service is coming from the NHS or the local council.

“Let’s stop the tragedy of people being dropped in A&E on a Friday night to spend the weekend in hospital because we cant look after them properly in social care.

“By 2015-16 over £3bn will be spent on services that are commissioned jointly and seamlessly by the local NHS and local councils working together. It’s a huge and historic commitment of resources to social care tied to real reform on the ground to help end the scandal of older people trapped in hospitals because they cannot get a social care bed.

“This will help relieve pressures on accident and emergency, it will help local government deliver on its obligations and it will save the NHS at least £1bn.

“Integrated health and social care – no longer a vague aspiration but a concrete reality transforming the way we look after people who need our care most.”

1.23pm Mike Birtwistle of MHP Health Mandate tweets: “All in favour of #integration but £3bn fund sounds to me like #leakyringfence. Interesting to see health figures once this is factored in”

1.19pm It is not yet clear where that extra joint spending will be coming from. Could it mean a further topslice of NHS commissioning budgets?

1.14pm Osborne commits £3bn to be spent on services “commissioned jointly and seamlessly” between health and social care.

It’s a “huge and historic commitment tied to real reform on the ground,” he says.

That triples the current joint health and social care budget, which in 2014-15 will be worth £1bn.

1.13pm The NHS isn’t just our priority, it’s the people’s priority, says Osborne.

1.08pm Osborne boasts that town halls and central agencies are taking a hit so the schools budget can be protected.

1.05pm Nothing on capital investment for the NHS - the emphasis seems to be on infrastructure and energy so far…

1.00pm The government commits to £300bn of capital investment over a decade. No word yet on how or if that impacts on the NHS.

12.57pm Osborne is now talking about the armed forces, foreign office and home office budgets.

Remember: keep checking this liveblog after his speech is over. We don’t get to see the CSR document until the chancellor sits down, so the real analysis doesn’t start until then. Stay tuned for analysis and reaction for the rest of the afternoon.

12.52pm But… once all of today’s changes are taken into account local government only gets a cut of two per cent.

It’s not yet clear how the Treasury has mitigated that 10 per cent grant cut. Could more of the NHS budget be heading into local councils?

12.50pm Local government funding cut by 10 per cent in 2015-16. Communities secretary Eric Pickles is praised for scrapping quangos. He’s a “model of lean government”, Mr Osborne says.

12.47pm As per this morning’s story in the Times (see below), George Osborne announces he will work to scrap “automatic progression pay”, where staff get incremental pay rises.

He pledges to scrap them in the civil service.

Although there appears not to be a commitment to scrap incremental pay rises more broadly in 2015-16, Mr Osborne says he will work to scrap annual increments in the NHS, schools, prisons and the police.

Public sector pay rises overall will be limited to an average rise of one per cent in 2015-16.

12.43pm Osborne isn’t talking about the NHS yet, so here’s a piece by our finance columnist Sally Gainsbury on financial creativity from the Department of Health.

Click here to learn about Sally’s Finance Departments Delivering Liberty and Excellence (FiDDLE) award.

12.35pm Osborne is on his feet. Employs an NHS metaphor: Britain is moving out of intensive care, he says.

12.33pm While we’re waiting for the CSR speech to begin, why not read Michael White, on why health secretary Jeremy Hunt is right to still with the CQC?

12.31pm PMQs still ongoing - Osborne on the front bench waiting his turn.

12.22pm Prime Minister’s Questions now under way. Tory MP Charlotte Leslie accuses Labour of “burying” damning reports about NHS care.

PM David Cameron replies: “There was a culture under the last government of not revealing problems in the NHS…

“There was a culture problem under Labour. The sooner they admit it the better.”

12.03pm In about half an hour we’ll begin our live coverage of George Osborne’s speech in the Commons. Do remember though that this page doesn’t update automatically - remember to refresh your browser every few minutes to get rolling commentary.

11.52am Further to Ben’s story about the Shelford Group (see the entry immediately below this one), here’s another exclusive acute sector finance story that went live yesterday, in case you missed it:

There has been a surge in the number of non foundation trusts predicting a deficit. Eleven are currently predicting shortfalls at the end of 2013-14, totalling £200m.

11.43am Emails obtained by HSJ reveal an elite group of teaching hospitals’ lobbying for hundreds of millions in extra funding.

Our acute sector reporter Ben Clover reports that the Shelford Group’s 10 leading teaching hospitals have pushed for an “infrastructure payment” on top of their existing contract income. They have asked for between £15m and £25m in extra funding a year per trust.

11.35am HSJ’s East of England reporter James Illman tweets: “Troubled @EastEnglandAmbtrust board meeting happening now. Non Executive Director Caroline Bailes has resigned. More coud follow”

11.33am Monitor and NHS England have called for input on how they can encourage local innovation through variations in the national tariff, which they will publish later this year, through a webinar taking place today.

11.32am George Osborne stands up in the Commons in one hour.

11.14am More health news from the Telegraph: The NHS plans an overseas recruitment drive to help cope with a shortage of doctors in hospitals, a minister has indicated.

The Telegraph reports Lord Howe, the health minister, said that British medical students were choosing not to pursue a “pressurised” career in accident and emergency.

They opted for easier specialties which let them take on more lucrative private work, he said. The NHS was turning to countries such as India, he added.

11.12am The NHS is right to focus on cyber security, writes HSJ editor Alastair McLellan in a leader today.

“A large scale hack of data held by the NHS is just the kind of “black swan” event described in the eponymous book by Nassim Nicholas Taleb”, he writes.

“While black swan events are by nature almost impossible to predict, it is possible to improve the ability to cope with the negative ones. Well done to the information centre for realising that.”

11am Go here to read James Illman’s HSJ briefing on the reorganisation of pathology services.

“Reconfigurations are likely to face long delays because of staff seeking to protect their jobs”, James writes, “a lack of available capital and a new commissioning environment that is still bedding down.

“With more work likely to be outsourced, the cost of complex tests could rise as private firms seek to ‘cherry pick’ the more straightforward (and profitable) work.”

But, being an HSJ briefing, there’s a lot more to it than that, so read the whole thing.

10.48am More fresh HSJ news today:

The report highlights that four of the five most financially challenged hospital trusts in England are in London, and the capital’s NHS faces growing pressure with services in need of urgent change.

10.47am New on HSJ this morning:

Hospital chiefs and other managers in the health service should have to sign up to a professional regulator so they are “held accountable for their actions and omissions”, the BMA said.

10.43am Chancellor George Osborne will announce the first steps twoards perforamnce-related pay across the public sector today, the Times reports.

The story says that teachers, council staff and nurses currently get pay rises to recognise time served. “This has made it impossible for Mr Osborne to contain the £160bn public sector pay bill”, despite a two year freeze on salaries.

10.23am And, the Telegraph reckons that the spending review will divert more NHS cash to councils to fund social care.Health minister Norman Lamb recently warned of an impending crisis in social care as councils struggled to fund enough places for ailing pensioners.

10.22am The Daily Telegraph has picked up on NHS England chief executive Sir David Nicholson’s first ever blog, published yesterday.

NHS England chief executive Sir David Nicholson has criticised public and press for a “lack of balance” in their portrayal of patient care scandals which have led to the deaths of hundreds of people, the Telegraph reports.

10.19am HSJ and the Nursing Times’s Steve Ford is live tweeting from the Oval cricket ground this morning from a session on public health.

So far, Public Health England chief executive Duncan Selbie has told the nursing audience they are “terrifying”, and listed tobacco and hypertension as the two main killers, in that order.

Follow Steve here.

10.15am Are patients with minor ailments the cause of the emerging crisis in casualty, asks the Guardian’s Denis Campbell.

The Guardian has run a two page inside look inside the A&E unit at Bradford Royal Infirmary, which is also prominently featured on page 1.

You can read it online here.

10.10am The Daily Mail has led with a story of Cure the NHS campaigner Julie Bailey being “driven from her home” after “death threats, abuse and the desecration of her mother’s grave.”

The newspaper quotes Ms Bailey describing “vipers” who have victimised her since she setup Cure the NHS after the death of her 86-year-old mother Bella Bailey at Stafford Hospital.

Dozens of families contacted her in 2007-08 and their complaints coupled with high mortality rates at the hospital led to an investigation by the Healthcare Commission and ultimately a public inquiry led by Robert Francis QC.

Following Mid Staffordshire Foundation Trust, which runs Stafford Hospital, being put into special administration Ms Bailey says she has been regularly abused and can no longer stay in the town.

She has sold her business, a town centre café, and is now living in an undisclosed location.

10.09am At around midday today chancellor George Obsorne will announce his comprehensive spending review for 2015-16 in the House of Commons. Although the government has pledged once again to protect health service spending, there will still be profound implications for the NHS.

Local government, which is responsible for public health and social care services, is expected to be cut by 10 per cent. Meanwhile there have been murmurs of changes to the money which is supposed to be shared between health and social care services.

Ministers have previously told HSJ they want to use the NHS commissioning budget topslice to fund integration.

Meanwhile putting health and wellbeing boards in charge of a potentially growing pot of integrated working cash has also been mooted.

It will be interesting to see whether and in what form these proposals have made it into Mr Osborne’s review.

8:45am: Good morning, clinicians have been given new leadership roles in the post-reform NHS, but many organisations are still working out what medical leadership means for them in practice.

Today on HSJ’s commisioning channel Kate WIlson writes: “New roles require fundamentally different ways of working for medics and few medical leaders are comfortable with the directive style − or telling others what to do.”