• In a document sent to trust finance directors, trusts are told their quarterly financial targets will be a “binary on/off switch” to secure STF funding.
  • 70 per cent of its STF allocation will depend on hitting financial target, while 30 per cent will depend on performance against the headline waiting time standards.
  • HM Treasury has been heavily involved in agreeing and setting the fund.

NHS regulators have spelled out the conditions for trusts to access the £1.8bn “sustainability and transformation fund” in 2016-17.

In a document sent to trust finance directors this morning, seen by HSJ, NHS Improvement said achievement of quarterly financial targets would be a “binary on/off switch” to secure access to trusts’ share of the STF.

If a trust achieves its quarterly year-to-date target, or “control total”, it will receive 70 per cent of its STF allocation, while the other 30 per cent will depend on performance against the headline waiting time targets for emergency, elective and cancer services.

The national STF, which is only available to emergency care providers, was announced in December following the government’s comprehensive spending review. The amount which has been provisionally allocated to each trust varies, depending on their emergency activity. Around a third of trusts initially rejected the control totals which NHS Improvement had proposed, and it is not clear how many of these have now agreed.

The Treasury has been heavily involved in agreeing and setting the fund, due to major concerns about the deterioration of NHS finances.

In a change from the original proposals, the document says, payments from the fund will not be linked to engagement with “sustainability and transformation plans”. These plans are currently being developed by providers and commissioners covering 44 areas of England.

STF payments relating to waiting time targets will start from this month, as payment for the first three months of the financial year depends on the agreement of a “stretching, but credible improvement plan”. The improvement trajectories will vary between trusts, depending on their previous performance.

For each month from July 2016 to April 2017, 12.5 per cent of the total possible payment will be dependent on achieving the improvement trajectory for the 18-week referral-to-treatment standard, with another 12.5 per cent linked to the four-hour standard for accident and emergency care. The remaining 5 per cent is linked to performance against the 62-day cancer standard.

Trusts will be able to “earn back” any missed monthly payments in each quarter for emergency and elective care by bringing performance back in line with the overall trajectory. There are also some small tolerance levels built in for performance between July and December.

The finance aspect will also operate on a cumulative basis, so if a provider misses a quarterly control total but achieves its target total in a subsequent quarter, it could receive the full amount of funding.

In January, NHSI said the government’s funding settlement for the health service, inlcuding the STF, is dependent on the provider sector delivering a breakeven position this year, after accounting for the £1.8bn. But Jim Mackey, chief executive of NHSI, has already conceded that this is unlikely, with local plans suggesting a deficit of £550m

Last year the reported deficit was £2.45bn, but the underlying position was closer to £3bn.

The document adds that delivery against the STF targets will be subject to an annual review process after the end of 2016-17, signed off by the Department of Health and HM Treasury, which will also consider “any recommended changes required for the STF in 2017-18”.