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New restrictions on better care fund cash

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Better care fund cash will be used to compensate acute hospitals if local integration initiatives fail to generate a reduction in emergency admissions, the Department of Health has announced.

The modifications have been set out today by the DH and Department for Communities & Local Government after health secretary Jeremy Hunt last month promised that an element of “risk sharing” would be incorporated into the initiative.

Councils have warned that the change to the programme – under which they and the NHS use a pooled budget worth at least £3.8bn to integrate health and social care services – will create significant new risks for adult social care.

The change has been announced following widespread fears from the NHS provider sector that it would be placed at financial risk if the fund did not lead to lower hospital admissions. NHS England is also known to have been concerned to ensure that the local better care fund plans are financially sound.

Today’s measures mean that greater controls will be placed over £1bn of the better care fund money.

Of this, about £400m will be held back as performance-related payments, which will depend on local areas’ ability to reduce accident and emergency admissions.

The DH has not set a firm national target for the reduction of A&E admissions, but LGC and sister title Health Service Journal understand the minimum expectation will be a 3.5% cut in A&E admissions in 2015-16. If achieved, this would equate to savings nationally worth £400m.

Under that scenario, if local plans are successful and those savings are achieved through falling A&E activity, the money will be released to local areas to be spent on integrated care as they deem appropriate.

If A&E activity does not reduce, the money held back will be used to pay for it.

The remainder of the £1bn will have to be spent within the NHS on non acute services. If every area set a target of 3.5% reduction in A&E, that would leave £600m to be spent within the NHS.

Richard Humphries, assistant director for policy at The King’s Fund, said the announcement had “the potential to drastically reduce councils’ options when setting social care budgets”, because “many were planning to use the fund to protect social care services.”

He said: “This announcement is a sign of growing anxieties within government as the NHS heads towards a financial crunch in 2015-16.

“The better care fund is well intentioned but with no new funding, it is papering over the cracks of deteriorating NHS finances and social care budget cuts.”

A senior local government figure told LGC: “This moves the fund away from being about integration to being about managing risks in the NHS.

“Exactly how much of a risk this creates for councils will depend on local circumstances and relationships. But in the worst case scenario, if the [A&E] target is missed, it will mean less money is available for social care.

They said the measure would disrupt local areas’ plans, forcing them to review the plans that they submitted to the DH in spring.

Meanwhile, the DH has also said today that 80% of better care fund plans were on target to significantly improve local services through integrated care.

Most of the plans are still being assured. However, 14 have been approved. These are:

  • Dudley
  • Hammersmith and Fulham
  • Kensington and Chelsea
  • Westminster
  • Greenwich
  • Leeds
  • Liverpool
  • Nottinghamshire
  • Reading
  • Sunderland
  • Rotherham
  • Torbay
  • Warwickshire
  • Wiltshire

Health secretary Jeremy Hunt said: “Local authorities and the NHS are making excellent progress in developing plans that will give patients better, joined up care and allow hospitals to focus on treating the people who really need to be there. The plans are packed full of ideas and show that strong partnerships are being forged with different teams like never before.

“Successive governments have talked about bringing the NHS and social care together for decades – this is the first, transformative step to making that a reality. We will continue to nurture and support the development of these plans to deliver our shared ambition so that every part of the country provides better care for patients closer to home.”    

Simon Stevens, the chief executive of NHS England, said: “This marks an important step in ensuring more joined-up community health and care services for some of our most vulnerable citizens, and we will now be working closely with our partners in local government and the local NHS and many others to ensure the rigour of the local planning matches the scale of the transformation we all want to see. The NHS will widely welcome this collaborative approach.”

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