Memorandum by the Department of Health
(PE 1) (continued)
Figure 2.3.1(a)
NEW PROGRAMME BUDGET METHODOLOGY
BACKGROUND
6. In 2002, the Department initiated the
national Programme Budgeting Project. The aim of the Project is
to develop a primary source of information, which can be used
by all bodies, to give a greater understanding of "where
the money is going" and "what we are getting for the
money we invest" in the NHS. The Project aims to provide
an answer to these two questions by mapping all PCT (and Strategic
Health Authority) expenditure, including that on primary care
services, to 23 programmes of care based primarily on medical
conditions (see Appendix).
7. A focus on medical condition rather than
input cost forges a closer and more obvious link between the object
of expenditure and the patient care it delivers. Analysis of expenditure
in this way should help PCTs examine the health gain that can
be obtained from investment; and will help inform understanding
around equity and how patterns of expenditure map to the epidemiology
of the local population.
8. In evidence to the Committee (October
2003) Secretary of State emphasised his oversight of the new system
of Programme Budgeting. In summary, he sees it as a key strand
of work to demonstrate delivery of the NHS Plan, of judging investment
against outcome, and to show that new money has been spent to
boost the services it was intended for.
BACKGROUND TO
PROGRAMME BUDGETING
1. Programme Budgeting had its roots in
the Rand Corporation in the USA in the 1950s. Its first major
application was for the US Department of Defence in the 1960s
where it was used as part of a cost accounting tool that could
display, over time, the deployment of resources towards specific
military objectives. Such objectives were looked at in terms of
wars overseas, the support of NATO or the defence of the homeland,
instead of the conventional "inputs based" budgetary
headings of tanks, missiles or diesel fuel. Allocation of new
resources, or shifts between budgets, could be judged on their
relative contribution to these specific objectives.
2. This approach can be applied to healthcare.
Instead of seeing investment on the level of a hospital or drug
budget, the focus switches to specific health objectives or medical
conditions. The aim is to maximise health gain through deploying
available resources to best effect. This aim complements the commissioning
role of PCTs.
FINANCIAL YEARS
2003-04 AND 2002-03
3. From financial year 2003-04 onwards,
each PCT (and Strategic Health Authority) will report within their
annual accounts the totality of their expenditure on a programme
basis each year. This "bottom up" information will be
available in the Autumn. In the interim, the NAO and HM Treasury
requested that the Department provide a "top down" analysis
of expenditure (by programme budget category) for inclusion within
Schedule 5 of the 1Department's 2002-03 Resource Accounts. The
figures within Schedule 5 are repeated in the table below:
Table 2.3.1(b)
DEPARTMENT OF HEALTH—RESOURCE ACCOUNTS
2002-03
Schedule 5
The Key objectives are:
A. To reduce the incidence of avoidable
illness, disease and injury in the population.
B. To treat people with illness, disease
or injury quickly, effectively and on the basis of need alone.
C. To enable people who are unable to perform
essential activities of daily living, including those with chronic
illness, disability or terminal illness, to live as full and normal
lives as possible.
D. To maximise the social development of
children within stable family settings.
The Department cannot currently make a reliable
estimation of the split of overall spend against each of these
objectives. The Department is working to ensure that the information
presented in Schedule 5 allows a more detailed analysis of expenditure
against their objectives. As a result of the first stage of this
work the Department is now able to reliably estimate the split
of overall spend against conditions. This is reproduced below.
Resources by Programme Budget Categories
for the year ended 31 March 2003
|
| Gross
| Income | Net
|
|
| £'000
| £'000 | £'000
|
| Programme Budget Categories |
| | |
| The Department of Health's overall aim is to improve the health and wellbeing of the people of England through the resources available to prevent/treat:
| | | |
| All diseases caused by infectious organisms, (excluding Tuberculosis and Sexually transmitted disease)
| 825,528 | 22,066
| 803,462 |
| All cancers and tumours, malignant and benign (including those with suspected or at risk of developing cancer)
| 3,330,722 | 54,629
| 3,276,093 |
| Disorders of the blood or blood forming systems
| 707,049 | 10,551
| 696,498 |
| Disorders of internal metabolism and its regulation
| 1,366,423 | 55,997
| 1,310,426 |
| Problems of mental health (including patients with Alzheimer's syndrome)
| 6,130,307 | 112,074
| 6,018,233 |
| Patients where the primary issue is the problem of learning disability
| 1,662,074 | 610
| 1,661,464 |
| Problems relating to the neurological system
| 1,465,595 | 32,615
| 1,432,980 |
| Problems relating to the eye and vision |
1,282,192 | 17,870
| 1,264,322 |
| Problems relating to the ear and hearing and balance
| 287,665 | 5,856
| 281,809 |
| Problems relating to the heart, and the circulation of blood in the central and peripheral vessels
| 5,776,608 | 162,269
| 5,614,339 |
| Problems of respiration, (including tuberculosis and sleep apnoea)
| 2,849,492 | 71,866
| 2,777,626 |
| Problems due to the teeth, (including preventive checks and community surveys)
| 2,271,454 | 493,649
| 1,777,805 |
| Problems of gastro intestinal system | 3,527,222
| 81,774 | 3,445,448
|
| Problems of the skin | 1,074,295
| 28,247 | 1,046,048
|
| Problems of the musculo skeletal system (excluding trauma)
| 3,211,157 | 59,008
| 3,152,149 |
| Problems due to trauma, and injuries (including burns)
| 3,292,058 | 49,258
| 3,242,800 |
| Disorders of the genito urinary system (except for those relating to infertility)
| 2,672,580 | 47,329
| 2,625,251 |
| Maternity and problems associated with reproduction
| 2,976,972 | 42,880
| 2,934,092 |
| Conditions of babies in the neonatal period
| 751,339 | 10,084
| 741,255 |
| Poisoning, toxic effects and other adverse events, whether accidental or deliberate
| 569,398 | 7,642
| 561,756 |
| Individuals who have no current problems but who are involved in programs for prevention of illness and promotion of good health
| 815,956 | 17,491
| 798,465 |
| Problems related to life-management difficulty and problems related to care-provider dependency
| 183,136 | 2,458
| 180,678 |
| Other Areas of Spend/Conditions: |
| | |
| — General Medical Services/Personal Medical Services
| 3,280,510 | —
| 3,280,510 |
| — Strategic Health Authorities (including Workforce Development Confederations)
| 3,646,783 | 294,900
| 3,351,883 |
| — National Insurance Contribution
| — | 6,396,924
| (6,396,924) |
| — Miscellaneous
| 6,007,636 | 1,133,974
| 4,873,662 |
|
| Net Operating Cost | 59,964,151
| 9,212,021 | 50,752,130
|
|
Note:
This schedule was not prepared in this format in 2001-02,
therefore comparatives are not available for 2001-02.
The analysis contained in Schedule 5 uses 2002-03 activity indicative
provider costs (reference costs) and prescribing information as
the basis for apportioning the totality of NHS/Department spend
across various programme budget categories. In 2003-04, the analysis
will be based on a "bottom up" approach. All PCTs will
allocate/apportion their spend at the local level and report the
results to the Department. The 2003-04 Schedule 5 will be an aggregate
of these returns.
Programme Budget Categories
|
| PBC | Description
| Expanded description |
|
| 1 | Infectious Diseases |
All disease caused by infectious organisms, excluding Tuberculosis and Sexually transmitted disease
|
| 2 | Cancers & Tumours |
All cancers and tumours, malignant and benign. Including those with suspected or at risk of developing cancer
|
| 3 | Blood Disorders | Disorders of the blood and blood forming systems
|
| 4 | Endocrine, Nutritional and Metabolic Problems [ENM]
| Disorders of internal metabolism and its regulation
|
| 5 | Mental Health Problems |
Problems of mental health including patients with Alzheimer's syndrome
|
| 6 | Learning Disability Problems
| Patients where the primary issue is the problem of learning disability
|
| 7 | Neurological System Problems
| Problems relating to the Neurological system
|
| 8 | Eye/Vision Problems |
Problems relating to the eye and vision |
| 9 | Hearing Problems | Problems relating to the ear and hearing and balance
|
| 10 | Circulation Problems |
Problems relating to the heart, and the circulation of blood in central and peripheral vessels
|
| 11 | Respiratory System Problems
| Problems of respiration, including tuberculosis and sleep apnoea
|
| 12 | Dental Problems | Problems due to the teeth, including preventive checks and community surveys
|
| 13 | Gastro Intestinal System Problems
| Problems of the gastro intestinal systems |
| 14 | Skin Problems | Problems of the skin, including breast.
|
| 15 | Musculo Skeletal System Problems (excluding Trauma)
| Problems of the Musculo Skeletal system, excluding trauma
|
| 16 | Trauma & Injuries (inc burns)
| Problems of Trauma & Injuries (including burns)
|
| 17 | Genito Urinary System Disorders (except infertility)
| All Genito urinary problems except for those relating to infertility
|
| 18 | Maternity & Reproductive Health
| Maternity and problems associated with reproduction
|
| 19 | Neonates | Conditions of babies in the neonatal period
|
| 20 | Poisoning | Poisoning, toxic effects and other adverse events, whether accidental or deliberate
|
| 21 | Healthy Individuals |
Individuals who have no current problems but who are involved in programs for prevention of illness and promotion of good health
|
| 22 | Social Care Needs |
Problems related to life-management difficulty and problems related to care-provider dependency
|
| 23 | Other | Other conditions and Other congenital malformations
|
|
2.4 EXPENDITURE
ON COMMUNITY
CARE
2.4.1 Could the Department provide a table showing, by
service, net expenditure in real terms by central and local government
on community care, broken down by residential and non-residential
care (taking into account relevant service pay and price increases),
over the most recent five year period for which such data are
available? Could this data include Social Security and Housing
expenditures contributing to Community Care objectives? Could
it also show this data in graphical form? [2.4.1]
1. Table 2.4.1 provides details of central and
local government net expenditure on services for community care
in England, for 1998-99 to 2002-03, the latest year for which
information is available. All figures have been adjusted to 2002-03
prices using the latest Gross Domestic Product deflator.
2. Community care expenditure is taken to mean expenditure
on non-residential and residential care provided or arranged by
local authorities for adults; community health services provided
by the NHS for adults; certain social security benefits which
support community care objectives; and certain expenditure on
housing. Calculation of local authority expenditure by client
group involves a degree of estimation.
3. The data in the table are set out in graphical form
in Figure 2.4.1. The graph shows that since 1998-99 there
has been real terms growth in expenditure on all services, with
the exception of the Department for Work and Pensions (DWP) supported
residential care. The reason for the decline in the DWP supported
residential care expenditure was as a direct result of the April
1993 community care reforms. These reforms transferred care management
and funding responsibility for new admissions to independent sector
care homes to local authorities and ended the former system of
higher Income Support payments for people in such homes unless
they had preserved rights.
Table 2.4.1
NET EXPENDITURE ON SERVICES FOR COMMUNITY CARE (2002-03
PRICES) ENGLAND
|
| | |
| | £ million
|
| 1998-99 |
1999-2000 | 2000-01
| 2001-02 | 2002-03
|
|
| A. Local Authority Domiciliary Care (1)(2)
|
| Assessment and Care Management | 887
| 944 | 998
| 1,078 | 1,170
|
| Direct Payments | 11
| 44 | 51
| 58 | 82
|
| Home Care | 1,378
| 1,447 | 1,490
| 1,533 | 1,585
|
| Day Care for Older People | 202
| 211 | 249
| 267 | 272
|
| Day Care for Other Adults | 583
| 613 | 644
| 662 | 693
|
| Equipment and Adaptations | 71
| 76 | 114
| 126 | 126
|
| Meals | 50 |
55 | 61
| 60 | 57
|
| Other Services | 412
| 436 | 360
| 365 | 348
|
| Total A | 3,594
| 3,825 | 3,967
| 4,148 | 4,332
|
| B. Community Health (3-7)
|
| Chiropody | 100
| 106 | 114
| 147 | 210
|
| Family Planning | 66
| 71 | 78
| 97 | 129
|
| Immunisation and Surveillance | 3
| 3 | 4
| 2 | 2
|
| Screening | 67
| 72 | 78
| 91 | 132
|
| Professional Advice and Support | 126
| 127 | 129
| 59 | 39
|
| General Patient Care | 1,092
| 1,059 | 1,036
| 766 | 710
|
| Community MI Nursing | 603
| 682 | 779
| 795 | 870
|
| Community MH Nursing | 401
| 415 | 436
| 400 | 423
|
| Community Maternity | 244
| 223 | 202
| 292 | 163
|
| Health Promotion | 61
| 62 | 64
| 30 | 61
|
| Community Dental | 97
| 104 | 114
| 73 | 183
|
| Services to GPs | 240
| 297 | 364
| 472 | 701
|
| Other CHS | 360
| 412 | 476
| 469 | 854
|
| Total B | 3,460
| 3,634 | 3,874
| 3,693 | 4,477
|
| Total A plus B | 7,054
| 7,459 | 7,842
| 7,841 | 8,808
|
| C. Local Authority Residential Care for (1)(2)
|
| Older People (Aged 65 or over) | 2,277
| 2,364 | 2,335
| 2,368 | 2,711
|
| Adults aged under 65 with: |
| A Physical Disability or Sensory Impairment |
179 | 192
| 200 | 207
| 274 |
| Learning Disabilities | 683
| 741 | 809
| 856 | 1,122
|
| Mental Health Needs | 178
| 182 | 203
| 217 | 267
|
| Total C | 3,317
| 3,479 | 3,547
| 3,648 | 4,374
|
| D. Income Support: Residential Care,Nursing Homes and Residential Allowance Cases (8-13)
| 1,705 | 1,565
| 1,487 | 1,408
| 600 |
| Total C plus D | 5,022
| 5,044 | 5,034
| 5,056 | 4,974
|
| E. Other Social Security Benefits (8-17)
|
| Attendance Allowance (14) | 2,408
| 2,479 | 2,568
| 2,651 | 2,665
|
| Disability Living Allowance (14) | 4,660
| 4,866 | 5,141
| 5,465 | 5,663
|
| Invalid Care Allowance | 712
| 744 | 763
| 800 | 825
|
| Independent Living Fund (9 and 15) | 104
| 102 | 112
| 117 | 145
|
| Social Fund Community Care Grants (16) | 84
| 83 | 84
| 84 | 85
|
| Total E | 7,968
| 8,273 | 8,667
| 9,115 | 9,383
|
| F. Housing (20-22) |
| Adaptations to all LA Dwellings for Older People and Disabled Adults (17)
| 99 | 100
| 99 | 110
| 114 |
| LA Grants; Disabled Facilities Grants (18) |
117 | 124
| 139 | 150
| 174 |
| Housing Corporations; ApprovedDevelopment Programme (ADP) (19)
| 78 | 140
| 128 | 123
| 137 |
| LA Sponsored RSL (LASHG) (19) | 56
| 50 | 60
| 52 | 51
|
| Total F | 349
| 415 | 426
| 434 | 476
|
| Total E plus F | 8,317
| 8,688 | 9,093
| 9,549 | 9,859
|
| Grand Total A to F | 20,393
| 21,191 | 21,969
| 22,446 | 23,641
|
|
Footnotes to table:
Sections A and C
1. Local Authority expenditure for 2000-01, 2001-02 and
2002-03 is obtained from the PSS EX1 return; individual service
lines include overhead costs. For years prior to 2000-01 it is
obtained from the RO3 current expenditure return but with a share
of overhead costs allocated to service lines on a pro-rata
basis. Figures for 2000-01 and 2001-02 are therefore not strictly
comparable with those for earlier years. The RO3 return was redesigned
in 1998-99 and equipment and adaptations and meals were made memorandum
items leading to some under-recording and consequent inflation
of the other services expenditure; data for these items for 1998-99
and 1999-2000 are therefore not strictly comparable with those
for earlier years. Expenditure on direct payments was only recorded
from 1998-99 onwards.
2. Assessment and care management, although included
under local authority non-residential care in Part A, also includes
expenditure which is relevant to residential care (Part C).
Section B
3. As it is not possible to supply net expenditure figures
from the Hospital and Community health Services (HCHS) programme
budget, figures are gross expenditure and this may mean that they
are slightly overstated.
4. For figures derived from the HCHS programme budget
analysis, it has been assumed that the following has been spent
on adults: approximately 90% of chiropody, 95% of family planning,
1% of immunisation and surveillance, 100% of screening, 35% of
professional advice and support, 95% of total general patient
care, 95% of community mental illness nursing, 80% of community
learning disability nursing, 70% of health promotion and services
to GPs under open access and other community spending. It has
also been assumed that 100% of maternity care is spent on the
delivery and no costs are associated with the mother, and that
100% of community dental is spent on children.
5. The above allocations have been taken from the Expenditure
Per Head Of Population exercise.
6. Administration costs for community health services
are not separately identifiable and are not included in the community
health figures.
7. In 1996-97 several categories of the programme budget
were affected by the changes to accounting practice and the changing
structure of the NHS. Included in these was the need to capitalise
redundancy payments and recharges were no longer included.
Sections D & E
8. Figures for 1999-2000 onwards are on a Resource Accounting
and Budgeting basis.
9. All figures are based on information received from
DWP ASD Information Centre on caseload and average weekly amounts.
except for Independent Living Fund which is 85% of GB Outturn
except for 2002-03 figures are those which underlie the Public
Expenditure.
10. Any change in expenditure from previous published
figures is due to enhancements to methodology or the availability
of more up to date information.
11. Income Support Quarterly Statistical Enquiries, May
1996 to February 2003.
12. Expenditure is based on Preserved Rights Residential
Care and Nursing Home cases and Residential Allowance cases for
England.
13. Excludes unemployed claimants who are now provided
for by Jobseekers Allowance.
14. Disability Living Allowance replaced Attendance Allowance
(for people under 65) in 1992.
15. Expenditure for Independent Living Fund estimated
as 85% of Great Britain out-turn as at September 2003.
16. Final Grant Expenditure. Information derived from
Social Fund Computer System.
17. Invalid Carers Allowance was renamed Carer's Allowance
in April 2003.
18. From April 2002 claimants in Residential Care and
Nursing Homes had preserved rights abolished and became the responsibility
of local authorities. With the introduction of Pension Credit
residential allowance rate of Income Support was withdrawn in
October 2003.
19. 2002-03 is partly based on forecasts, with the latest
actual data in the model being August 2003.
Section FSource: Housing Investment Programme (HIP) Annual
Plan returns (section 5) and HIP BPAM from 2001 onwards.
20. Disabled Facilities Grants are paid to the private
sector, including RSL tenants, and also to LA tenants; figures
shown represent totals of mandatory and discretionary grants under
relevant Acts. Source: ODPM P1D returns; and HIP HSSA 2002 return
for 1997-98 onwards.
21. Housing Corporation ADP approvals for schemes by
Registered Social Landlords (mostly housing associations) in respect
of homes for rent and sale to certain "special needs"
groups (frail elderly, people with mental health problems, learning,
or physical disabilities) and one "general needs" group
(elderly with warden support). This covers the Corporation's own
programme and joint schemes, and also local authority-sponsored
schemes using Local Authority Social Housing grant. Source:
Housing Corporation Stewardship Report: elderly and disabled
categories only.
|
