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Better Care Fund will deliver less than a third of planned savings – NAO

The Better Care Fund will not deliver even a third of the planned £1bn savings as early preparations were “inadequate” and “did not match the scale of the ambition”, a new report from the National Audit Office has found, leading MPs to brandish the scheme a “shambles”.

The £5.3bn Fund, which has been drawn from existing NHS and council budgets, has been designed to integrate health and social care in an effort to reduce A&E admissions, treat people in the community and cut the length of stay in hospitals for old and disabled people. It will see the funding split among 151 localities to be used on locally-led schemes and is due to be introduced in April 2015. However, initial plans did not meet ministers’ expectations or offer the level of savings expected. As a result, local teams resubmitted the plans to government in April this year.

Initial plans estimated that the Better Care Fund would save the NHS £1bn in 2015-16, but revised estimates put that figure at only £314m of savings.

It was agreed that local areas would develop plans for spending the Fund with minimal central prescription, in an attempt to drive local innovation. However this has resulted in “no central programme team, no programme director and limited risk management and no analysis of local planning capacity, capability, or where local areas would need additional support”, the NAO has concluded.

The NAO is also sceptical of local areas’ abilities to meet the prescribed target of a 3.5% reduction in emergency admissions. According to the report this would be a “struggle” when admissions have risen 47% over the past 15 years.

In addition, the initial scheme guidance failed to mention the scale of savings expected from the fund.

Amyas Morse, head of the NAO, said that ministers were right to pause and redesign the scheme when they realised it would not meet expectations.

“The Better Care Fund is an innovative idea but the quality of early preparation and planning did not match the scale of the ambition. The £1bn financial savings assumption was ignored, the early programme management was inadequate, and the changes to the programme design undermined the timely delivery of local plans and local government's confidence in the Fund's value.”

He added: “The Fund still contains bold assumptions about the financial savings expected in 2015-16 from reductions in emergency admissions. To offer value for money, the Departments need to ensure more effective support to local areas, better joint working between health bodies and local government, and improved evidence on effectiveness.”

Richard Humphries, assistant director of policy at The King’s Fund said that the introduction of the Better Care Fund at a time of mounting financial pressures on the NHS brings with it significant risks.

“Although the recent changes made to the operation of the Fund go some way to easing concerns about its impact on the NHS, they represent a substantial shift of risk back to local authorities and leave local areas just five months to prepare to implement their plans,” he said.

“Given the tight timescales and absence of any new money in the Fund, local areas are being expected to achieve too much, with too little, too soon. Achieving the headline ambition of reducing emergency admissions by more than 3% would require a dramatic reversal in demand for hospital services which has been rising inexorably in recent years.

He added that while the Fund is an important step it is not a substitute for new funding to invest in essential changes to services, and that a new transformation fund is needed to help meet the costs of developing community-based service while covering double running costs during the transition between old and new models of care.

Johnny Marshall, director of policy at the NHS Confederation, said: “We agree the Better Care Fund’s success rests on ‘assumptions’ which ‘may still be over-optimistic’ regarding the ability of integrating services to reduce costs. It is our view that whilst there is much evidence that greater integration and personalisation improves outcomes, the evidence that it delivers financial savings is still in its early stages. It will take time for the new models of care to allow us safely to disinvest in existing services. This is why we will need financial flexibility and extra resources to allow double running of some services while we move to the new models of integrated care. This will require us to consider health and social care spending together.”

Margaret Hodge, chair of the Commons Public Accounts Committee, has branded the planning for the scheme a “shambles”.

She added: “Successful delivery depends on goodwill and joint commitment but delays and changes to the Fund’s design have weakened its credibility with local bodies and lost goodwill. It is deeply disturbing that local government believes the changes to targets and how the Fund will be run move the integration agenda backward and not forward.”

The Department of Health said it disagreed with the criticism of the early stages of the programme.

A spokesperson said: “This is the most ambitious plan to transform care ever undertaken and we ensured detailed work took place a year ahead of the launch to allow us time to iron out the issues that the NAO itself now acknowledges have been addressed.

“Last month over 97% of local areas had their plans approved, ensuring that people will be able to get seven-day care services that work for them and saving an estimated half a billion pounds of taxpayers' money too.”

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