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Richard Humphries: Is it time to be bold with the better care fund?

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The upcoming review of the better care fund must highlight opportunities for development to support the integration of the NHS and social care.

The prime minister’s announcement in June of a new funding settlement for the NHS included a requirement for what the then health and social care secretary Jeremy Hunt later described as ‘the full integration’ of the NHS and social care. Less attention was given to the announcement that the better care fund would be reviewed to make sure it supports that goal.

In the history of integration initiatives, the better care fund will get decidedly mixed reviews.

Originally called the integration transformation fund, it arose from the 2013 spending review and was hailed as the coalition government’s flagship integration policy: “a single pooled budget for health and social care services to work more closely together in local areas, based on a plan agreed between the NHS and local authorities.”

While everyone agreed – and still does – that sharing resources across the NHS and local government is a good thing, expectations of what the better care fund could achieve, and how quickly, were heroic. The initial £3.8bn fund was not new money. Instead it was drawn largely from clinical commissioning group (CCG) allocations.

The national conditions for its use were stringent and plans had to be assembled quickly.

Later the rules were tightened to prioritise delayed transfers and emergency hospital admissions, inevitably fuelling tensions between local government and NHS England about how the money should be used, as well as concerns the oversight and sign-off processes were too burdensome and over-prescriptive.

So it was unsurprising that last year’s assessment by the National Audit Office concluded that the better care fund had not achieved planned savings or reductions in delayed transfers and emergency admissions.

More positively it found that the fund had been successful in incentivising local areas to work together. More than 90% of local areas agreed or strongly agreed that delivery of their plan had improved joint working.

The better care fund has grown to £5.1bn this year. The bulk of it (£3.6bn) remains NHS money ringfenced from CCG allocations, with another £1.5bn paid direct to councils as a result of the 2017 budget increase for adult social care and £468m for disabled facilities grant, also paid direct to councils. Some places have chosen to pool additional resources, bringing the total up to just under £6bn.

These numbers are small in the scheme of things but contain some important provisions, for example, the NHS contribution includes funding for the Care Act, carers’ breaks and reablement.

Given the perilous state of local council finances, it is no wonder there is nervousness about the outcome of the review. With councils grappling with setting their budgets for next year, at the very least local government will seek assurance that the NHS will maintain its share of the better care fund, noting that the 3.4% annual increase for the NHS appears to include this minimum contribution.

So the current review of the BCF is timely and important. It is encouraging that the Ministry of Housing, Communities and Local Government is jointly leading the review with the Department of Health and Social Care. It is likely to focus on the future amount of pooled money, the national conditions and metrics, governance, planning and oversight requirements.

It is, however, worth noting that although a 3.4% annual increase is munificent by local government standards, it will not transport the NHS into a land of milk and honey. NHS England will continue to seek maximum leverage on how its share of the better care fund will get spent and to what effect.

But the review also offers a chance to move beyond the organisational politics of public spending. With the numbers of people needing integrated care set to soar, the time for timidity is over – a bolder and far more ambitious framework is surely needed.

Though the better care fund itself will never resolve the fundamental differences between the NHS and social care in terms of entitlement and eligibility, everyone agrees that place-based planning is the best way to ensure resources are used to get the best outcomes for people.

Our work on emerging integrated care systems identifies a focus on the ‘public pound’ rather than separate budget silos as one success factor.

The review could consider ways of fundamentally recasting the better care fund. Instead of being seen as a distracting top-down initiative affecting less than 5% of total NHS and social care spending, it could become a more powerful catalyst for change, involving a far bigger pooling of NHS and social care budgets.

For example, it might form the basis of a proper transformation fund to shift care away from hospitals and long-term care towards care and prevention in people’s own homes and communities.

The NHS minimum contribution, along with local authority social care budgets, could be gradually raised over time so that a bigger proportion of local spending is jointly agreed, eventually achieving a single, local ringfenced budget for health and social care with a single commissioner, as recommended by the Barker Commission.

When I first wrote about the better care fund five years ago I quoted Roger Water’s lyrics from “Money”, a track from Pink Floyd’s classic album Dark Side of the Moon, referring to attitudes to funding reviews.

As he said: “Share it fairly but don’t take a slice of my pie.” The outcome of the better care fund review will tell us how much has changed.

Richard Humphries, senior fellow – policy, The King’s Fund

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