Governance changes for second phase response

by Steve Brown

21 May 2020


NHS England and NHS Improvement have set out changes to the processes for reporting revenue expenditure and claiming reimbursement for capital spending related to Covid-19.

The changes mark a move into the second phase of the service’s coronavirus response as it moves beyond the initial peak in demand, restarts non-Covid urgent services and explores the potential to deliver some routine elective care.

‘The measures look to strengthen financial governance arrangements and maintain a good grip on cost control, while not hampering the continuing operational response to the pandemic,’ said HFMA director of policy and research Emma Knowles (pictured).Emma Knowles of HFMA

The central bodies have already confirmed an extension of the temporary block contracting arrangements introduced in April to ensure that funding and cashflow did not become a barrier to the provision of services. Block contract amounts took account of spending levels during the winter months of 2019/20, with top-up payments made to cover reasonable additional costs due to Covid-19. These arrangements have now been extended until the end of October.

The new guidance anticipates that spend in some areas will be now be paused, although it underlines that this would be revisited if there was a second wave of infections. ‘In many areas we will expect spend to be markedly different to spend in March and April,’ it said.

A table sets out areas where spending is expected to increase or reduce. For example, there is an expectation the cost of paying sick pay at full pay for staff self-isolating will reduce – in part this will be a reaction to the increase of staff testing enabling non-infected self-isolating staff to safely return to work. This will also lead to an expected decrease in the cost of additional agency or bank staff to cover sickness absence.

Costs relating to the direct provision of isolation pods are also expected to decrease.

Areas of cost increase include costs relating to: staff returning to work for the NHS and fast-tracked students; the remote management of patients; the segregation of patient pathways; and after care and support costs. Some costs such as the increased capacity in intensive treatment units is expected to stay similar to those experienced in phase 1.

The guidance also ushers in a revised process for Covid-related capital investment. Under the initial system adopted, providers were allowed to make capital investment to support their Covid-response up to £250,000, and then gain retrospective approval from the national capital team.

However there should now be fewer cases of Covid-related capital investment requiring an immediate decision. And so, from 19 May, all Covid-19 cases requiring national public dividend capital funding require national pre-approval.

The guidance promises that submissions for approval will be turned around in seven days with urgent cases turned around in 48 hours.

Second phase capacity plans were due to be submitted by regional teams this week. Capital bids for investment to meet second phase requirements will have to take account of these capacity plans and will require the prior agreement of the regional director of finance.