Switching over to systems

It will take more than words to change the focus away from individual organisations in the English NHS. So simply saying that we are moving to a ‘system by default’ model does not make it so.

Institutionally focused lines of regulation remain firmly in place – and will remain so without legislative change – and there is a clear tension between this and the ambitions to move to system oversight.

That said, the operational planning guidance makes the direction of travel very clear. There is no change to the April 2021 deadline for all systems to become integrated care systems. And NHS England and NHS Improvement have made it abundantly clear that organisations need to be working together to deliver system goals. Individual organisation plans and decisions must be system coherent.

The operational guidance comes with welcome steps to support the move to systems. Clinical commissioning groups with historic overspends – some of which will be related to allocations that have been consistently under target, despite recent progress on pace of change – will have debt written off or brought down to levels where repayment is more feasible.

The guidance acknowledges that these debts have become a barrier to system transformation. It is certainly easier to see organisations being more motivated to work together if they can focus on what can be done collectively in the future, rather than first having to address financial deficits from previous years.

You can read more about the key components of the planning guidance, and reaction to it, in our cover story this month.

Similarly, we are promised a solution for provider historic debt – although a final approach had not been agreed in time for the planning guidance.

Some argue that the proposals make little practical difference for providers – swapping interest payments for public dividend capital dividends. But the restructuring of debt that has no chance of being repaid could help local bodies to look ahead rather than over their shoulders.

Again, this provides a better foundation for collaborative work. Read about what a change from loans to PDC would mean in accounting terms in this month’s technical section.

Addressing the causes of these historic debts will also be important alongside providing a new starting position.

Some of that will be about relative funding – getting closer to target funding levels. And some of it will need extra funding in absolute terms – where providers are dealing with unsustainable growth in demand with insufficient cash or where the lack of capital resources leaves providers operating with ineffective or inefficient estates.

Sustainability funding will now be concentrated on providers and commissioners in deficit. And with 50% of the Financial Recovery Fund linked to system performance, the calls for collective working are backed up with a financial incentive.

If you want to maximise the amount of money coming into the local health economy, which will have a knock-on impact for all local NHS bodies, organisations need to focus on more than their own financial performance.

Moving to system working will require organisations to work in new ways and this will also put different demands on finance professionals.

Some finance directors are already taking on specific system roles - see The art of influence - but collective working places new demands on all finance directors. Finance teams will also have to work differently.

The King’s Fund’s recent report – Thinking differently about commissioning – highlights how this is already the case in some CCG areas, with the adoption of system-wide processes for monitoring spending, activity and performance and even the preparation of single system finance reports.

Joint working and embedded staff members are likely to be characteristics of this new way of working.

Signing up to some warm words about collective working won’t be enough. It will require genuine behavioural change, backed up by clear commitment from boards and finance teams.

This involves more than simply flicking a system switch, but turning on a new mindset is the right first step.