HARINGEY CLINICAL COMMISSIONING GROUP MAY 2013 GOVERNING BODY 2013/14 FINANCIAL PLAN

Transcription

1 HARINGEY CLINICAL COMMISSIONING GROUP MAY 2013 GOVERNING BODY 2013/14 FINANCIAL PLAN 1. Introduction The purpose of this paper is to provide an update to the Governing Body of the CCGs 2013/14 financial plan. The information set out in this paper is consistent with the 2013/14 budgets loaded onto the ledger and will form the basis of our next financial plan submission to NHS England. It will set out the 2013/14 financial allocation received from NHS England and will provide an update regarding the budget setting process. It will also highlight key next steps /14 Allocations The CCG has received three separate financial allocations for 2013/14. These are to fund: Programme costs; Running costs Capital costs Each of these is set out below: 2.1 Programme Allocation The CCG received notification of its baseline programme allocation for 2013/14 on 13 December 2012 totalling 310.2m, inclusive of growth at 2.3%. NHS England have subsequently carried out a number of validations to ensure that funding has been allocated to the correct commissioner. As a result a number of adjustments have been applied against the baseline to calculate a revised programme allocation of 306.7m. The table below sets out the key movements: Programme Allocation 000 Initial Baseline as per the DH baseline return Running Cost Reduction Specialist Commissioning Transfer (max. take) 2% Non-Recurrent Headroom Redistribution Local Authority Prescribing Primary Care IT 2.3% 2013/14 Baseline Programme Allocation Notified adjustments: Primary Care IT Public Health Shortfall 341,911 (11,097) (22,952) (3,064) (734) (868) 6, ,170 1,168 (91)

2 Bowel Screening (102) New Born Screening (119) Havens (74) Primary Care Adjustment 4,850 Ophthalmology (168) Pharmacy Services (91) Community Dental (Whittington) (684) Secondary Dental Care (976) 2012/13 Carry Forward Surplus 1,804 Additional Specialist Commissioning Transfer (8,859) Transfer to NHS Property Services (143) Total Revised Programme Allocation 306,685 Haringey PCT reported a surplus of 2.7m in its draft 2012/13 annual accounts. The CCG will receive a proportion of this underspend in 2013/14. The overall 2013/14 budget of 306.7m set out above, includes 1.8m as the CCG s share of the PCT surplus from 2012/13. The majority of the allocations adjustments are cost neutral to the CCG in that the responsibility to fund the expenditure will follow the transfer in funding; therefore there will be no impact upon the CCGs financial position. However the Governing Body needs specifically to be aware of the following: Running costs The Governing Body will be aware of an error in our 2013/14 financial allocation relating to the adjustment for running costs. The net impact of this is 4.2m. We continue to raise this issue with NHS England but in formulating this financial plan have assumed that we will not be successful in recovering this funding in 2013/14. Specialist Commissioning The financial plan assumes that the impact of transfers in funding to NHS England for specialist commissioning will be cost neutral. An additional transfer to NHS England of 8.9m has been included in the above table. This issue is explained in more detail in section 8 below. Public Health Discussions are taking place with the Local Authority in respect of funding transferred from the CCG for which the CCG continues to be the commissioner. This relates to 0.2m for Terminations of Pregnancy, 0.6m for Dietetics & Nutrition and 0.7m in respect of prescribing costs for which the CCG will continue to incur the expenditure. We are working jointly with the Local Authority to agree the mechanism to enable this to be cost neutral for both organisations. 2.2 Running Costs Allocation CCG Running Cost allocations have been calculated at 25 per head of population, and for Haringey this equates to 6.860m. This allocation will fund the both the CCG s own running costs and the recharge for the support services provided by North East London Commissioning Services Unit.

3 The CCG has a statutory responsibility to ensure that it does not exceed its running cost allocation of 6.860m. 2.3 Capital Allocation The CCG has bid for, and been allocated, Capital funding of 300k to enable it to fund its 2013/14 plan. 2.4 Allocation Summary The table below summarises the total CCG allocations for 2013/14: Allocation 000 Revenue Allocations Programme Running Costs 306,685 6,860 Total Revenue Allocations 313,545 Capital Allocation /14 Budgets In order to calculate budgets for 2013/14, the CCG has applied the Department of Health planning assumptions for growth, inflation and efficiency to the financial outturn for 2012/13. Good progress has been made with respect to 2013/14 budget setting. All budgets for internal CCG commissioning services have been agreed with budget holders. The CCG also has a balanced budget in respect of its Running Cost allocation. All budgets have now been loaded onto the ledger. As highlighted in the Chief Officers Report, good progress has also been made in agreeing 2013/14 contracts with local providers. However the agreement of a number of acute contracts remains outstanding in particular University College London and the Royal Free Hospital. Progress made to date on each budget area is set out below: 3.1 Acute SLAs The budgets have been set using either agreed contract values or the latest contract offer. A reserve has been set aside for the purpose of securing agreement on unsigned contracts. The value for the North Middlesex reflects the agreed block contract value for 2013/14. The Whittington contract for 2013/14 is the second and final year of the two year block contract.

4 3.2 Other Acute The contract with London Ambulance Service has been agreed at 8.9m. The remainder of the budgets have been set in line with the 2013/14 planning assumptions. 3.3 Non Acute The 2013/14 contracts with Barnet, Enfield and Haringey Mental Health Trust ( 29.6m) and Camden &Islington MHT ( 0.6m) have been agreed. A budget of 0.8m has been set aside to fund the re-provision of services moving from our acute contracts. All of the remaining budgets have been agreed with the respective budget holders. 3.4 Running Costs CCG pay and non-pay budgets, together with the contract with the NELCSU, have been set in line with allocation of 6.860m /14 Overall Financial Plan The above sections have set out both the funding available to the CCG together with progress made in setting the budgets for each of its areas of responsibility. The table below sets out the CCG s 2013/14 Financial Plan: 000 Resource Limit 313,545 Expenditure Acute SLA s In Sector Whittington Hospital NHS Trust Whittington BTA Estates Transfer North Middlesex University Hospital NHS Trust University College London NHS Foundation Trust Royal Free London NHS Foundation Trust Moorfields Eye Hospital NHS Foundation Trust Barnet And Chase Farm Hospitals NHS Trust The Royal National Orthopaedic Hospital NHS Trust Great Ormond Street Hospital NHS Trust Acute SLA s Out of Sector Specialist Commissioning - Transfer (to be allocated) Specialist Commissioning Additional Transfer to NHSE Acute Demand and Growth Reserve 68,308 1,000 69,000 25,583 14,921 4,050 2, ,227 (3,710) (8,859) 3,781 Total Acute & Integrated Care 191,605

5 Other Acute London Ambulance Service Acute SLA Exclusions Non Contracted Activity Emergency Threshold In Health Readmissions Total Other Acute Non Acute Mental Health Continuing Care Community Prescribing Primary Care Other Commissioning Public Health Services Total Non-Acute Running Costs Programme Staff Contingency and reserves 2% Non-Recurrent Risk Share Total Expenditure Forecast 2013/14 Deficit 8,859 2,068 2,248 1,525 1, ,746 32,076 21,163 2,397 26,839 2,568 3, ,274 6,860 1,483 4,247 6, ,418 (2,873) The total revenue funding is 313.5m. Total budgeted expenditure is 316.4m leaving a financial deficit of 2.9m. This position is consistent with the financial plan submissions made by the CCG to NHS England /14 QIPP Plan As previously reported to the Governing Body, the 2013/14 QIPP plan has a risk adjusted value of 13.0m. The QIPP plan has been included in 2013/14 contracts with providers and budgets have been adjusted accordingly. A summary of the QIPP plan is set out below: Project Theme Risk Adjusted Value 000 Admissions Avoidance and Older People 1,435 Urgent and Unscheduled Care 1,264 Cardiology 713 Gastroenterology 671 Urology 638 Orthopaedics 177

6 Ophthalmology 275 Gynaecology 105 Dermatology 30 ENT 96 Referral Management general 154 Mental Health 299 Continuing Healthcare 1,001 Prescribing 1,485 Corporate Costs and Other Commissioning 880 Acute Productivity 2,999 Obstetrics 660 POLCE 118 Total 13, Primary Care Strategy Based on the strength of the Primary Care Strategy, the NCL Cluster secured agreement from NHS London to fund the Strategy from the PCT 2% headroom funding; this equated overall to 47m over 3 years. In Haringey the planned investment is: Year /13 Year /14 Year /15 Total: 2.697m 3.665m 3.629m 9.991m Haringey CCG s Commissioning Strategic Plan (CSP) for 2013/ /16, highlights how Primary Care has a pivotal role to play in reducing use of secondary care for basic healthcare provision and in improving population health and acknowledges that radical change is required to improve quality, capability and productivity further, and to create capacity within primary care. The first pre-requisites are to re-design the care pathways and to prepare the primary care teams to take on an enhanced role. The primary care strategy funding is being used to provide the additional resources required to carry out this work. The pathway re-design projects will result in the production of a clear statement (ie specifications and protocols) of precisely what General Practice and the wider primary care teams are expected to deliver and the resources required. The next stage will then be to provide the necessary education and training to equip GPs and other clinicians in practices/networks to respond to the specifications. Allied to, but also in addition to the pathway re-design work, there are a number of QIPP projects under development which may require pump-priming investment in order to generate subsequent returns. These are grouped under: Admissions avoidance and Integrated Care Dermatology GP referral management Planned Care Gastroenterology

7 Urgent and Unscheduled Care Overnight District Nursing/Catheter Services Tissue Viability Service The investment in the delivery of the Primary Care Strategy is therefore an essential enabler to facilitate this transformational change in Haringey and to create a sustainable health economy. In addition to the pump-priming funds, this will include rebalancing of the health system to ensure more commissioning investment in primary and community settings. The emerging priorities for the use of the primary care investment in 2013/14 can therefore be summarised as: Aligned to CCG key objectives Improving access Clinical education GP provider networks There are on-going discussions about the funding allocation which will be managed through the Risk Share agreement. Once the total funding has been allocated it will be released through local authorisation. In Haringey, the governance process will be through: Haringey Primary Care Strategy Implementation Steering Group Haringey Primary Care Investment Panel Haringey Finance and Performance Committee Haringey CCG is clear in its key strategic aims to create a transformation of the health economy by reducing the amount of care in hospital and increasing the provision of community-based care delivered by primary care teams. The investment in the delivery of the Primary Care Strategy is therefore an essential enabler to facilitate this transformational change in Haringey and to create a sustainable health economy. The total proposed in the 2013/14 Investment Plan is 4.037m. This includes a deliberate over-programming of 10% against the indicative funding of 3.629m as set out in the NCL Primary Care Strategy, to allow for programme slippage. The Governing Body needs to be aware that the funding source for the Primary Care Strategy is via the risk-share agreement for CCGs in North Central London. The CCG is unable to provide funding for the Primary Care Strategy from within the financial allocation set out above in section 2. Therefore the approval of the Primary Care Strategy investment plan for 2013/14 is dependent upon a source of funding being in place. At the time of writing this report the risk share for NCL CCGs had still be agreed. Clearly, this represents a significant risk to the CCG. This is highlighted in section 8 below.

8 7. Capital As highlighted above, the CCG has been allocated Capital funding of 0.3m for 2013/14. The proposed Capital plan is set out below: Capital Expenditure 000 Capital to support smart working within the CCG office Capital to support primary care strategy Office IT projects Total Capital Expenditure Financial Risks Key financial risks include: 8.1 Specialist Commissioning Transfers of funding to NHS England for specialist commissioning have been reflected in the financial plan using the assumption of cost neutrality. The initial budget transfer to NHS England was 79.4m. An additional 8.9m has now been transferred to NHS England giving a total transfer of 88.3m. Difficulties have been encountered in triangulating the reduction in CCG budgets with finance and activity information for individual providers. CCGs have been told by NHS England that no organisation will benefit or lose financially from the specialist commissioning budget transfers and that in-year reconciliations between CCGs and NHS England will take place. Therefore we have assumed cost neutrality within our 2013/14 financial plan. However, an entry regarding this issue has been included in the CCG s risk register. 8.2 Financial Risk Share As highlighted above, at the time of writing this paper the risk share for CCGs in North Central London had yet to be agreed. Clearly, this gives rise to financial risks to the CCG both in respect of securing a funding source for the Primary Care Strategy together with providing coverage for in-year financial cost pressures particularly around high cost/low volume activity. 9. Next Steps Good progress has been made in producing the 2013/14 financial plan for the CCG. However some further work is needed. The key steps are set out below: Finalise the 2013/14 contracting round; Update the 2013/14 budget book to reflect agreed contract values; Revise the 2013/14 budgets on the ledger to reflect agreed contracts; and Secure approval from NHS England regarding our 2013/14 financial plan.

9 Updates will be taken to both the Finance & Performance Committee together with the Governing Body as needed. 10. Recommendations The Governing Body is asked to: APPROVE the 2013/14 Financial Plan for the CCG; and APPROVE the 2013/14 Capital Plan for the CCG David Maloney Chief Finance Officer May 2013