Suresh Patel: The Better Care Fund – is genuine integration within reach?

Suresh Patel is Senior Manager, Public Services at Mazars LLP

The Better Care Fund (BCF) was launched through the June 2013 Spending Round. It is intended as a key element of public service reform, aiming to drive closer integration between health and social care and improving outcomes for patients, service users and carers.

The basic premise is that pooling £3.8bn into a single budget will enable health and social care services to work together more efficiently. The fund consists of sums reallocated from existing budgets, although local areas can and have chosen to pool more than just their fund allocations.

The BCF has received considerable coverage since the Chancellor’s announcement, most of it less than positive. While no one can knock its objectives, commentators have questioned whether the substantial changes needed in both systems and behaviour to reduce unplanned acute admissions (one of the main targets for BCF) can be delivered in time to realise the required savings.

In The Nationally Consistent Assurance Review reported in October 2014 that of the 146 BCF plans only 6 were approved with a clean bill of health. Almost two-thirds of plans were approved with support, meaning that while plans contained no fundamental flaws in approach or material concerns, some actions identified in plans required clarification and additional information.

Typically this related to the need for further evidence or detail on delivering national conditions (such as plans for seven day services).  While only five plans were not approved outright, the remaining were approved with conditions, indicating that while the fundamental approaches were suitable there were specific challenges to be addressed before implementation.

This mainly related to engagement with providers to support the credibility of achieving national conditions and non-elective targets.

The status of BCF plans suggests that many of the lessons learned from previous drives to improve integration appear to have been lost in the corporate memory of government, NHS bodies and local authorities. Anecdotal evidence suggests that:

• NHS bodies are concerned that some local authorities may use pooled resources to shore up budgets which have seen reductions of 40% since 2010.
• NHS staff are fearful that with local authority control of pooled budgets, they could end up being transferred to local government via the back door.
• Not all local partners across NHS and local government have been party to the discussions and agreements on what BCF means for them.
• There is a lack of clarity over who will bear the risks (what happens if something goes wrong?) and what will become of the rewards (what happens to any under-spends?).
• The lack of ‘coterminosity’ between NHS organisations and a local authority in an area can create challenges, such as getting the right people around the table at the right time, working through the different organisational cultures, working styles, personalities and local politics.
• Meetings, meetings and more meetings are inefficient if the nominated representatives of each organisation do not have the authority to make decisions.
• Whilst an agreement is required to be in place by 31 March 2015 (or risk funding being held back), many local areas will struggle to achieve a meaningful, realistic, useful agreement with sufficient consensus by that date.
• Local government and NHS finance teams have had as yet little sight and involvement in the practicalities of operating the BCF pooled budget.

Experience tells us that bringing together organisations with different cultures, personalities and operating styles can be challenging. The issues highlighted above increase tensions further. More difficulties arise from the fact that local government and the NHS have different financial reporting frameworks, different procurement rules, different VAT regimes and different regulatory requirements.  Although the BCF brings together related funding, the respective statutory rules and regulations governing the source budgets, allocations and grants will still need to be met by the individual organisations.

So there are many questions that councillors, CCG governing body members and senior managers need to be asking:

• Are you sure you know who is paying for what and how this impacts on the financial planning of your own organisation?
• How clear and effective are the arrangements in place to deliver the objectives and vision of the BCF plan?
• How clear is the role of the Health and Wellbeing Board and any associated sub-committees and working groups?
• Is there clarity over what has been delegated by the respective governing bodies and what can be delegated, e.g. the CCG’s governing body and the council/cabinet?
• What are the risk sharing arrangements and is there a signed agreement between all parties? If not, how will risk sharing be applied?
• Who will host the pooled budget and have the practicalities around VAT, procurement and payment mechanisms been considered adequately?
• The BCF pools existing funding and grants, some of which is ring fenced and some of which comes with conditions that need to be met. How do you know that the conditions and ring fence requirements for your organisation are being met?
• Does your organisation’s audit committee understand what assurance it needs and from where to discharge its responsibilities and inform the annual governance statement?
• What is the role of internal audit and other potential sources of assurance?
• How will you measure the success of the pooled budget arrangements? What are the qualitative and quantitative measures of success and how will you obtain reliable, accurate and complete data to properly evaluate performance?

No one disputes the validity of the overarching aims of the BCF and there are many plans that reflect fantastic collaborative working between health and local government. As ever the devil will be in the detail and as finance and governance professionals we have a role to play in understanding the impact of the details and supporting decision makers to ask the right questions. Perhaps the difference this time is that both NHS and local government organisations know that BCF is critical to their ability to meet the needs of local people while resources continue to be reduced.