Financial arrangements extended

by Seamus Ward

14 January 2021

NHS England and NHS Improvement have decided to roll over current financial arrangements into the first quarter of 2021/22.

amanda.pritchard lIn operational guidance issued on 13 January, NHS chief operating officer and NHS Improvement chief executive Amanda Pritchard (pictured) said the current pressures had led to the decision to roll over the block contract system into the new financial year.

In September, the national bodies set the financial arrangements for the second half of the 2020/21 financial year. Block contracts, set up in the temporary financial regime established for the first half of 2020/21, were retained during the second six months, and will now continue into the first three months of 2021/22.

The current arrangements give systems fixed funding envelopes for the first time. Systems are expected to break even within these allocations, though individual organisations can deliver a surplus or deficit with the agreement of the other organisations in the system.

Ms Pritchard confirmed that the NHS would ‘not be initiating a planning and contracting round with a changed financial framework before the start of the year’.

‘We cannot confirm total funding for Q1 as that will be subject to discussion with the government, but systems should not take any steps that would reduce capacity and the ability to respond to Covid-19 in anticipation,’ she added.

The guidance sets out how the NHS must continue its Covid-19 response, while maintaining essential services and remaining in a level 4 incident for at least the rest of the financial year.

Mutual aid will be extended across regional boundaries to facilitate transfers, and there will be further action to mobilise staff, free up clinically useful estate and increase available capacity. The letter covers surge plans, including the protection of capacity for emergency care and the highest priority patients; and the use of the independent sector, with system plans due to be in place by 22 January.

There is also guidance on freeing up capacity by improving discharge across systems – this includes using the £588m earmarked for discharge funding – and maximising the workforce, such as by recruiting healthcare support workers and overseas trained nurses.