The Guidance sets out new financial controls, with the imposition of “system control totals” that attempt to force collective responsibility for achieving these targets. This is a challenge for what have until now been relatively loose and vague agreements.
Last month the HSJ questioned the extent to which ICSs really are integrated or committed to common control totals, noting:
“to date only Dorset ICS has gambled all of its sustainability funding [SF] on meeting the collective control total. All other systems, even those that have been accepted as fully-fledged ICS such as Surrey Heartlands and Bedfordshire, Luton and Milton Keynes, have resisted pooling all their SF — keeping much of it linked only to individual providers’ financial targets.”
It appears from the more detailed Section 5 on finances that NHS England has tacitly conceded the difficulty of this: what happens, for example, if some trusts in an STP/ICS area sign up for a system control total (spending cap), but others won’t? How will rivalries between big trusts in local systems be dealt with?
The political price of forcing major cuts or closure of a trust is such that NHS England has limited scope for financially squeezing those with the biggest problems.
Seriously unstable, concludes audit of NHS finances
So while the release of revenue transformation funding will depend on NHS England/Improvement approval of system plans, only half of the Financial Recovery Fund is to be tied to the financial performance of the whole system, and trusts may still get a proportion of their FRF even if they don’t meet the targets.
However, 50% of a trust’s allocation will be based on its own performance (p30). Where they do not deliver “financial trajectories,” any FRF money that has been “paid but not earnt” will be converted to additional debt (“DHSC financing”).
To make matters worse (p30), organisations that miss their financial targets “will not automatically be entitled to the system element of their FRF allocation” – effectively imposing an additional penalty for being under-funded.
There are also reward payments for providers that break even or achieve a surplus in 2019/20 and 2020/21: so for the minority of relatively affluent trusts and FTs the system is very rewarding, while the others must dodge their way through penalties and mounting problems.
Section 5 on Finance (p37) also makes clear that NHS England is still tightening down on trusts and CCGs which have continued to provide and pay for treatments which are deemed to be of low clinical value: trusts will be given targets for reducing provision, and this will be further enforced by the CQC:
“Proposed activity reduction numbers by CCG, provider and ICS/STP will be provided. We will ask systems to develop their own plans with a view to meeting or exceeding these numbers. The system plans will need to be agreed with all providers and commissioners. … Performance against the Evidence-Based Interventions programme is being incorporated into CQC reviews for providers of NHS services.” (p37)
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