Exclusive: Transformation fund could be raided for social care

Jon Rouse told HSJ a significant shortfall in social care resources over the next two years may force the region to spend some of its £450m transformation fund “to maintain statutory services”.

The region has projected a £176m gap in social care funding by 2021, and Mr Rouse warned that “we don’t know how to [close] that”.

Leaders in the region recently asked the chancellor for the additional £1.5bn due to be pumped into national budgets from 2018-19 to be brought forward.

Mr Rouse said: “The problem we’ve got is it comes too late in the spending review period. It makes 2017-18 an incredibly difficult year to manage…

“It will mean a number of things: it’ll mean local authorities will have to dip further into their reserves, to the extent that they can, and some of them are really very low.

“It runs the risk of diverting transformational resource into mainstream provision, because we have no choice in order to maintain statutory services and therefore be able to discharge into care homes and so on.

“It’s just the reality because we have to maintain a social care market and it’s in the NHS’s interests to do so – because we’d struggle even more in terms of delayed discharges and so on.”

Last week, NHS England chief executive Simon Stevens said the NHS’s budget settlement, which includes Greater Manchester’s transformation money, was “not intended to, and obviously cannot absorb, all the pressures in the local authorities”.

Mr Rouse said he would not need permission to use the money for social care because the transformation fund is “money pulled through” the same legal mechanism as the better care fund, which is already used for social care.

But he added: “I’d much prefer to do it if we were going to do something transformative in terms of the social care offer, not just to be shoring up mainstream provision.”

As part of the region’s devolution deal, Greater Manchester Health and Social Care Partnership has been given a £450m transformation fund from NHS England, which is intended to invest in creating new models of care.

Several senior leaders in Greater Manchester repeatedly raised concerns over social care funding last month when they appeared at the House of Lords’ inquiry into the long term sustainability of the NHS.

Sir Mike Deegan, chief executive of Central Manchester University Hospitals Foundation Trust and chair of the Shelford Group, also raised concerns over the NHS funding envelope, telling the committee: “When… nearly the entire general hospital sector is in deficit points that points to a systemic underfunding issue”.

Mr Rouse highlighted the gap in social care funding to HSJ, but said there are plans “on paper” to close the £1bn gap in NHS budgets.

He added: “Do I think it’s going to be extremely difficult? Definitely. It relies on significant return on investment. Even where you have a really robust partnerships and well intentioned plans, the time it takes to implement those plans is significant.

“So of course there’s a danger of slippage, there’s a danger of some of those savings projections underperforming. They are highly ambitious plans so I understand completely where Mike is coming from.

“But we have got plans to close that £1bn gap and that’s what we have to deliver.”