NHS Finance

25.05.18

Some providers and CCGs still unable to plan within financial limits

Some NHS organisations were unable to produce an operational plan that stays within their designated financial control totals and will require further support in working towards an improved position, NHS Improvement (NHSI) has revealed.

In board papers from its first-ever joint meeting with NHS England, NHSI said that while most organisations submitted plans in line with their control totals, some will still require external support.

Similarly, a gap remains between the expected levels of income and expenditure in commissioner and provider contracts.

However, NHSI did concede that this contract gap is lower than in previous years, and the regulator expects it will reduce further as the planning process is concluded.

The board paper, co-written by NHSI’s CFO Elizabeth O’Mahony and NHS England CFO Paul Baumann, follows on from planning guidance released in February this year, which asked providers and CCGs to refresh their existing 2018-19 plans with up-to-date activity and efficiency assumptions.

The revamped plans also had to reflect the extra money announced in the 2017 Autumn Statement, when the government announced an extra £2.14bn in funding.

All providers and CCGs were expected to develop “stretching, realistic plans consistent with in-year control totals,” which reflect a series of priorities for the financial year revolving around A&E admission figures, waiting lists, and investment in cancer, mental health and primary care.

They were asked to work together to set “realistic assumptions about activity levels,” ensure sufficient capacity would be available to meet operational performance expectations, and achieve a high degree of alignment by harnessing the help of STP leaders.

While some organisations still haven’t been able to submit plans within their control totals that meet these requirements, some early successes are already on the horizon. All CCGs, for example, have confirmed that they are planning to meet the Mental Health Investment Standard.

Going forward, NHSI and NHS England – which have outlined plans to bring their organisations closer together – will continue working with the providers that have still not submitted a financially sound plan in order to reduce individual gaps “as far as possible and serve overall balance in each sector.”

They will also make sure that the existing plans address particular priorities even beyond the need for financial credibility. For example, proposals need to have an appropriate ‘seasonal profile’ for workforce, activity and beds so that enough capacity is available to deal with spike in demand over the winter period.

Changes in staffing must also be aligned with the activity and financial plans and consistent with any planned decreases in agency take-up, and cost improvement plans must harness opportunities for better operational productivity rather than just savings.

Yesterday’s historic board meeting – which brought the two organisations together for the very first time – also discussed a raft of other major announcements, including Lord Carter’s brand-new review of community and mental health service efficiency and a second wave of integrated care systems.

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