Conclusions and Recommendations
1. Initially, the central government bodies
involved in planning the Fund lacked a clear and shared understanding
of its financial objectives. The Departments,
NHS England and the Local Government Association all had different
expectations from the Fund. While all parties intended the Fund
to improve local services through innovation, NHS England and
the Department of Health worked on a planning assumption that
the Fund would secure £1 billion in financial savings for
the NHS. However, the Treasury and Departments did not agree the
savings expectation as a formal target for the Fund and the Department
for Communities and Local Government had not worked on the basis
of a required savings target. The witnesses were unclear how imperative
the £1 billion savings expectation was during the early stages
of the Fund. The work prompted by the arrival of NHS England's
new chief executive in April 2014 was the stimulus for the pause
and redesign of the Fund, leading to the requirement that £1
billion be protected for the NHS. So the priority has shifted
from improving local services through integration to protecting
NHS resources. Some £253 million of the NHS contribution
to the fund will only be made available if the expected savings
from reducing emergency admissions to hospital are achieved.
Recommendation: In future spending discussions,
departments and the Treasury should unambiguously define service
and savings requirements and ensure they are clearly, consistently
and transparently presented to all parties.
2. The failure to be clear with local areas
about the expected savings severely undermined the initial planning
process. The Departments and NHS England
did not tell local areas in the initial planning phase that the
Fund should lead to £1 billion of savings in 2015-16. The
NHS England and Local Government Association teams that assessed
local plans for the Fund were also not aware of the need to meet
the savings expectation and, as a result, considered that 90%
of the plans were ready for ministerial approval. However, when
NHS England subsequently tested the expected savings it concluded
that it had confidence in only £55 million of savings, rather
than the £731 million promised in the plans. As a result,
the plans were not approved, planning was paused for three months
while the programme was redesigned and local bodies were required
to submit revised plans.
Recommendation: When overseeing local implementation
of complex and important reforms, the Departments should ensure
that they clearly communicate their objectives to those responsible
for delivery.
3. It was understandable given the pressures
on the NHS budget to pause for three months to redesign the Fund,
but the changes and delay eroded goodwill and put delivery of
the Fund's objectives at risk. More transparent
and rigorous planning by the Departments and NHS England at an
earlier stage should have occurred. All local areas had to resubmit
plans after the Departments redesigned the scheme in July 2014
which halved the time available to them to prepare for the Fund.
The Better Care Fund will not be a success without the active
support of local government. The Local Government Association
considered that the redesigned scheme moved the integration agenda
backwards and not forwards and it told us that local government
had contemplated walking away from the Fund.
Recommendation: The Departments should identify
all constraints on programmes from the outset and ensure that
mitigating those constraints does not undermine timely planning
and the successful achievement of objectives.
4. The confused accountability at national
and local levels has hindered the development of the Fund.
The Departments devolved delivery responsibilities to a local
level to encourage innovation without resolving accountabilities
for overseeing, delivering and monitoring the Fund. Initially,
the Fund's senior responsible owners were the policy holders from
the Department of Health and the Department for Communities and
Local Government. The current Senior Responsible Owner for delivery
of the Fund, who is from NHS England, was not appointed to the
role until July 2014 and is still accountable to the departmental
policy owners. At local level, health and wellbeing boards approved
local plans for the Fund, but they could not implement plans without
ministerial approval. It is not yet clear who is responsible for
performance management of the Fund once it starts.
Recommendation: The Departments should set
out, in a joint accountability system statement, the specific
responsibilities and accountabilities for the Fund of all local
and national partners, including for plan approvals, delivery
and value for money.
5. It is not yet clear how all local authorities
will protect adult social care services to the extent intended.
A primary objective of the Fund was to
protect the provision of adult social care services locally. Demographic
changes mean demand for adult social care services is increasing
at a time when available resources are shrinking. Many local authorities
are already reducing spending on social care as their budgets
become constrained. Until NHS England's intervention in April
2014, local authorities expected to have unrestricted access to
a pooled budget which was around £1 billion larger than it
was after the reset. It appears to the Committee that NHS spending
was judged a higher priority than supporting adult social care,
and 14 local plans still present serious concerns with regard
to the protection of adult social care in those areas. It appears
likely that the Fund will not, therefore, support adult social
services to the extent originally anticipated.
Recommendation: The Departments should write
to the Committee at the end of February 2015 setting out whether
they have resolved the outstanding issues in areas without fully
approved plans, and how they will deal with any areas which have
not met the national condition to demonstrate how they will protect
adult social care services.
6. We are not convinced that it is possible
to reduce emergency admissions and deliver £532 million of
savings in 2015-16. Emergency admissions
have increased by 4.9% for the first three quarters of 2014-15
compared with the same period in 2013-14 and delayed discharges
have also increased. The scale of the challenge in reversing the
long-term upward trends in emergency admissions and delayed discharges
is significant. Recent changes to the NHS tariff mean there is
now less financial incentive for acute trusts to reduce emergency
admissions than previously. Furthermore, there has been minimal
pump-priming investment to support the development of new community-based
services which are essential if future savings are to be secured.
Recommendation: The Departments should publish
an annual scorecard to demonstrate the extent to which the Fund
is supporting integration, maintaining adult social care, reducing
emergency admissions and saving money.
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