Funding boost in planning guidance

The guidance, Refreshing NHS plans for 2018/19, sees the financial systems in clinical commissioning groups move closer to that in providers with the introduction of control totals and a sustainability fund. Providers will see an increase in available sustainability funds and the potential lifting of some contract sanctions.

CCG resources will increase by £1.4bn, to be used principally to fund more realistic levels of emergency activity, additional elective activity to tackle waiting lists, ensure the mental health investment standard is met universally together with transformation in cancer and primary care services.

The additional funding will come from a number of sources:

• The requirement for CCGs to set aside 0.5% of their allocations will be lifted in 2018/19, releasing £370m to fund local pressures and transformation priorities. The additional requirement to spend 0.5% of allocations on non-recurrent measures has also been lifted.
• CCGs will receive an additional £600m in their allocations
• A new £400m commissioner sustainability fund (CSF) will be created, partly mirroring the provider financial framework to return CCGs to in-year financial balance while supporting and incentivising them to deliver against their financial control totals.

 

Financial control totals will be set for each commissioning group and CCGs will be expected to deliver financial balance after the application of the CSF – control totals will be set on this basis. The control totals will also take 2017/18 financial position into account with overspending CCGs expected to improve in-year financial performance by at least 1% of their overall allocations. Those will long standing or larger cumulative deficits will be given a more accelerated recovery trajectory.

Drawdown of cumulative underspends will be available subject to affordability and the agreement of the relevant NHS England regional team. CCGs will only be able to access the CSF if they deliver their control total. Guidance on the operation of the CSF was also published today.

For providers, the sustainability and transformation fund (STF) will be boosted by £650m to create a £2.45bn provider sustainability fund. Despite the change in name the fund will target the same objectives as the STF. The planning guidance said the additional £650m must at least produce a pound for pound improvement in the aggregate provider financial position and this will be reflected in 2018/19 provider control totals.

As in the current year, 30% of the fund will be linked to A&E performance. Though full details are to be published shortly, to access the performance element of the fund each provider will have to achieve 90% in A&E access or performance equal to that in the same quarter in 2017/18, whichever is better.

The planning guidance said it is expected the government will roll forward operational performance expectations – that is aggregate performance of more than 90% of patients seen within four hours in the month of September 2018 and most providers meeting the 95% standard in March 2019, with the NHS as a whole returning to meeting the 95% standard during 2019.

While the additional funding should allow for additional elective activity and a reduction in patients waiting more than a year, commissioners should plan for the number of patients on an incomplete pathway to be no higher in March 2019 than March 2018. And, where possible, this should be lower.

As well as the link to A&E performance, access to the provider sustainability fund will be based on accepting control totals – those that do will continue to be exempt from sanctions set out in the NHS Standard contract. NHS England will consult on extending the exemption to all national performance sanctions except those on mixed-sex accommodation, cancelled operations, healthcare-associated infections and duty of candour.

The existing two-year tariff will remain in place for 2018/19, though local systems are encouraged to consider payment reforms, particularly to complement local advice and guidance services. They have also been encouraged to implement local tariffs for emergency ambulatory care if they have not already done so, to replace current A&E and non-elective tariffs for appropriate conditions.

Integrated care systems – the new name for shadow accountable care systems and devolved health and care systems – will have new financial arrangements, working within system control totals. With the agreement of NHS England and NHS Improvement, this will give greater flexibility to vary individual control totals and agree in-year offsets in one organisation against financial under-performance in another.

Integrated care systems will be encouraged to operate both the CSF and PSF on a full system basis with no payment being made unless the system as a whole achieves its control total. If individual bodies do not achieve their control total the system as a whole will retain PSF and CSF funds, but allocation to individual bodies will be agreed with NHS England and NHS Improvement. These systems will be given greater autonomy.

NHS Providers director of policy and strategy and deputy chief executive Saffron Cordery (pictured) said trusts would welcome the further £650m of sustainability funding. However, she added that this meant less money for much needed service transformation.  

‘We support the expectation for providers and CCGs to plan and contract on the basis of agreed estimates of demand growth, which has often not occurred in the past. We also welcome a specific new mechanism to incentivise commissioners to do all they can to reduce emergency demand. But both of these will require consistent, effective, action by commissioners and a high degree of collaboration between commissioners and providers. Trusts will also be pleased to see the intent to drop nearly all contract fines and penalties, something for which NHS Providers has long argued.

‘We would also urge NHS Improvement to think carefully about whether, how and when it takes formal regulatory action against trusts who refuse to accept their control total. Trusts have told us that they are more concerned than ever about their ability to meet their control totals next year. It is of fundamental importance that trust boards set their own budgets and have the ability to legitimately reject, and then renegotiate, a control total which they believe is impossible to deliver.’