Financial Risk Share and Transitional Investment Fund North Central London Clinical Commissioning Groups 2013/ /18

Transcription

1 Financial Risk Share and Transitional Investment Fund North Central London Clinical Commissioning Groups 2013/ /18 1. Background The North Central London Clinical Commissioning Groups (Barnet, Camden, Enfield, Haringey and Islington) are committed to working collaboratively. A key part of that collaboration agreement is the Risk Share and the Transitional Investment Fund that both aim to pool financial resources in order to manage financial risk and invest in strategic change that would be beyond any individual Clinical Commissioning Group (CCG). 2. Proposed Approach 2.1 Overriding Principles Both the Risk Share and Transitional Investment Fund should be based on the principles of affordability, stability and equity. This is consistent with the principles guiding the planning for 2013/ Sources of Funding Risk Share Each CCG will contribute a proportion of their 0.5% contingency into the Risk Share arrangement and will be increased by available funds from the Transitional Investment Fund as agreed Transitional Investment Fund The primary source of funding will be the CCGs setting aside a proportion of their annual 2% non-recurrent allocation (the remainder will be retained by CCGs to spend with NHS England agreement). Those CCGs with an agreed deficit pre application of the 2% headroom, will contribute up to the amount of the surplus or 1% after the headroom has first been applied to their plan. There will be the opportunity for individual CCGs to commit funds over and above their initial contribution should they choose to do so. CCGs will contribute annually to the Transitional Investment Fund at an agreed level of at least 1% but the pay back to CCGs may vary in-year depending on the nature of the risks and where they materialise as well as the investment choices made. There will be an annual review of this agreement and contributions will be agreed before the start of each financial year. It is the aim of the agreement that each CCG will benefit as much as it contributes over the life of the agreement. 2.3 Timeframe The agreement will be for five years with an annual review of both participation and CCG contributions and commitments. A five year agreement is needed to support wider strategic and system change. It is intended that payback to all contributors over five years will be achieved in line with the principle of equity. 1

2 3. Expenditure to be covered 3.1 Risk Share The risk share will be used to cover in year unplanned exceptional costs. As part of the governance process set out in Para 4 below, CCGs will be required to explain their operating plans to each other. This will be completed at the beginning of each financial year to support the process of knowledge sharing, peer challenge and support. Knowledge and information may also be requested from NHS England to provide assurance in relation to each CCG s position. If concerns remain or are subsequently identified, external due diligence reviews may be requested to support proposals and fund applications. The costs of such reviews will be a first call against the risk share. 3.2 Transitional Investment Fund There are a number of specific areas where the North Central London Primary Care Trusts (PCT) made commitments that the CCGs believe it is right to continue. These are: Transitional support for the Barnet, Enfield and Haringey (BEH) Clinical Strategy. This support will be up to a maximum defined in the BEH Clinical Strategy Business Case. Transitional support for the Whittington. This will be the contractual agreement that originated between the five PCTs and the Whittington Hospital and runs until 2013/14. The Primary Care Strategy up to the amount put aside. 4. Governance The governance of this agreement will be through the North London Joint Clinical Commissioning Committee of the CCGs (JCCG). 4.1 Governance of the Risk Share Decisions on funding exceptional costs will be made during the year by the JCCG but no earlier than the October meeting based on the month 6 results. The decisions will be made on the basis of a business case(s) submitted by the respective CCG. A detailed financial report will be produced on each CCG based on month six performance to review the forecast year end position. This will be presented to the meeting of the North London Joint Committee of the CCGs in October. Those CCGs forecasting exceptional costs and making claims will be required, at the October meeting, to present their operating plans in detail to the Committee, the progress of that plan and the risks and issues they are managing. The aim is to give suitable challenge and support to those forecasting exceptional costs and to ensure that there is a real need to fund those costs. The objective is to use the best expertise available across the five CCGs to ensure that the costs are minimised. Should the claims be greater than the funding available in the Risk Share, CCGs may individually choose to increase their contribution at month six. 2

3 The JCCG will make the final decision on whether, in October, the full risk share should be utilised; delay the decision until later or provide only a proportion of the claim made. Performance against plan will then be presented at the meetings in November and December. Another detailed financial report will be produced by each CCG based on month nine performance to again review the forecast year end position and further review the exceptional costs. Any CCGs may make further claims against the risk share during the November to March period. In the event that the exceptional costs are greater than the size of the fund, the JCCG will be responsible for agreeing the prioritisation of resources. The assumption is that the fund will be allocated in proportion to the size of each individual CCG s approved claim(s) and will not be considered unless the CCG is forecasting that it will miss its control total. If the funds are not fully utilised in year, then the CCGs with net contributions to the fund will be repaid the excess pro-rata. 4.2 Voting Each CCG will have one vote. The CCG submitting the business case will not vote on their business case. Decisions will be made by unanimity where possible. Where unanimity is not possible decisions will require three out of four votes. 4.3 Governance of the Transitional Investment Fund Decisions on the allocation of the Transitional investment fund will be made at the March meeting of the JCCG, or as soon after as possible, for the forthcoming financial year. All existing commitments will be prioritised before any additional investments are considered. Decisions to allocate funds to transitional investment opportunities will be based on the submission of the business case by the lead CCG. All business cases will need to demonstrate that they: Deliver a financial payback in five years or less (where that exceeds the length of the agreement, the agreement will need to be continued for that investment only to ensure continuity of funding); Demonstrate a measureable impact on the value of healthcare delivered. This must include clear measureable health outcomes (agreed with appropriate patient involvement) and cost reductions; Contribute to the overall strategic intent of the North London CCGs as set out in their Strategic intent document. Funds approved by the JCCG for transitional investment opportunities can only be used for the purpose detailed in the business case. A report will be produced by the lead CCG for each meeting of the Joint Committee to an agreed standardised format to review progress, risks, issues and spend. If the Transitional Investment Fund is forecast to be underspent at month nine, the January meeting of the JCCG will consider the underspend for possible reallocation or return to the contributing CCGs. 3

4 Each CCG will have one vote and all CCGs will vote on all business cases. Decisions will be made by unanimity where possible. Where unanimity is not possible decisions will require three out of five votes for approval. 4

5 Appendix 1 Funding available and possible expenditure for 2013/2014 Risk Share Table 1: Funding available for 2013/14 Funding available through the contingencies m Barnet 1.08 Camden 0.74 Enfield 0.70 Haringey 0.55 Islington Surplus from Transition funding 1.91 Total 5.50 Transitional Investment Fund Table 2: Funding available for 2013/14 Funding available from part of the 2% for transition funding m Barnet - Camden 5.49 Enfield 0.87 Haringey 3.10 Islington Funding available from carry forward surpluses Camden Islington 4.15 Total Also identified in the North London CCG Collaboration Agreement are the acquisition of Barnet and Chase Farm Hospital by the Royal Free Hospital and a Value Based Approach to Integrated Care across North Central London. Both of these areas are likely to require funding but that will be subject to approval of a business case. It is suggested that these business cases are developed for the next available meeting of the Joint Committee and then any remaining funds in the transitional investment fund is allocated to the Primary Care Strategy. The remaining funds will be distributed to the CCGs with the aim of equalising each CCGs investment, using the principle of equity, one of the key principles of the fund. If 0.5m is assumed for each of the additional areas of transitional investment that would give an allocation of the Transitional Investment Fund as shown below. 5

6 Table 3: Potential allocation of the Transitional Investment Fund for 2013/14 Transition investment m BEH Clinical Strategy 9.70 Whittington Hospital 5.00 Royal Free acquisition 0.50 Value approach 0.50 Primary care strategy Barnet 2.50 Camden 2.50 Enfield 2.50 Haringey 2.50 Islington Total The summary of the positions for 2013/14 is shown below:- Table 4: Summary of contributions and allocations Camden Islington Barnet Enfield Haringey Application to be Agreed Total Source of risk share funds: Contingency , ,588 Headroom or plan balance 5,487 4, ,102 13,962 Return of 12/13 Surplus 12,000 4, ,152 Total source of funds 18,231 9,171 1,077 1,570 3, ,702 Application of risk share: Group A - Risk Share 5,502 5,502 Group B - Transitional investment fund Primary care strategy (agreed plan) 2,500 2,500 2,500 2,500 2,500 12,500 Whittington support (agreed 2-year contract) 193 2, ,890 5,000 BEH clinical strategy (Indicative 9.7m) 3,300 3,200 3,200 9,700 Royal Free/BCF merger Integrated Care Value approach Total application of funds 2,693 4,910 6,184 5,823 7,590 6,502 33,702 Net risk Pool support/(access) 15,538 4,261-5,107-4,253-3,937-6,502 6