Delegation between partners; and Delegation to the Health and Social Care Partnership, established as a body corporate.

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1 INTEGRATED RESOURCES ADVISORY GROUP: REMIT Purpose This note sets out the scope of work for an expert group to advise on the resource implications of the Government s policy for Integration of Health and Social Care. Background Scottish Ministers are committed to improving integration of adult health and social care in Scotland. Consultation proposals for integrating adult health and social care were published on 8 th May: The consultation document incorporates the recommendations from the resources short life working group and proposes two models for financial integration: Delegation between partners; and Delegation to the Health and Social Care Partnership, established as a body corporate. The first option is a direct recommendation of the previous group, and the second combines features of two of the other recommended models. Ministers took the view, upon consideration of the consultation and its broad priorities, that these two choices provide a strong and potentially effective balance of local flexibility and accountability. The purpose of the Integrated Resources Advisory Group is to contribute to the development of policy instructions for changes to legislation, and to identify changes in secondary legislation required by the proposals along with requirements for guidance to be developed and advice to partners on implementation. The timescales vary for these outputs with milestones at end of January, end of March and end September To consider the financial governance implications of the proposals for integrating budgets, and for each model: 1) To contribute to the development of policy instructions for changes to legislation; 2) To advise on the need for secondary legislation; 3) Develop statutory guidance in support of the proposals; 4) Produce professional advice notes to assist NHS Board and Local Authority Finance teams in implementing the proposals; 5) Provide input to the production of the Financial Memorandum that will accompany the Bill when introduced to Parliament, and to the Standard form partnership agreement. The Group will produce: Input to policy instructions; Recommendations for secondary legislation; Draft guidance notes; Professional Advice notes; Input to the Financial memorandum; Input to the Standard form partnership agreement.

2 Governance The group is accountable to the Delivery Group for Health and Community Care as follows: Health & Community Care Delivery Group Bill Advisory Group Integrated Resources Workforce /HR Governance & Accountability Outcomes Commissioning Locality Planning Accounting Treatment & VAT Financial Recording & Reporting Controls Assurance & Risk Financial Planning, Financial Man. & Finance Function Capital & Assets Chair The meetings will be chaired by the Scottish Government Deputy Director, Finance Health and Wellbeing. Secretariat Secretariat support will be provided by Integration and Reshaping Care Division within the Scottish Government Directorate for Health and Social Care Integration. Any papers will normally be circulated 5 working days prior to meetings; minutes will be issued for agreement within 10 working days of each meeting. Group members will be invited to suggest agenda items two weeks in advance of each meeting and the final agenda will be agreed with the Chair. Location Meetings will be held in Edinburgh at a location to be confirmed in advance of each meeting. Frequency Meetings will be held quarterly. Membership Christine McLaughlin (Chair), SG Deputy Director Finance Health and Wellbeing; Marjory Stewart; Scottish LA Directors of Finance; Paul Leak, SG policy lead, Integrated resources; SG Finance: Julie McKinney, Graeme Owenson; SG Integrated Finance Leads: Colin Crawford, Anne Monk; Directors of Finance (Chairs of Functional Groups): Sandra Black, Susan Goldsmith, Paul James, Derek Yule, Norie Williams; COSLA: Vicki Bibby; Audit Scotland: Fiona Kordiak; CIPFA: Don Peebles; CHCP Director: Jim Forrest; ADSW : Mike Brown.

3 WORKSTREAM REMITS 1) Accounting Regulations/Treatment and VAT Lead Director: Derek Yule, Highland Council Functional expert: Mark Doyle, NHS Fife; VAT Consultants, to be confirmed following tender (early Feb) SG finance: Alan Morrison & Hazel Black. Consider the accounting treatment and practices required for the two models proposed for integration, taking account of the impact on the Regulatory Frameworks and Standards, including the applicable accounting standards and guidance set out in the Government Financial Reporting Manual (FReM), NHS manual of accounts and the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code). Identify solutions to minimise the financial impact of the different accounting treatments for the two models, including the potential changes to regulation or legislation required to achieve the policy outcomes Liaise with HMRC and Scottish Government VAT advisors to re-draft the existing VAT guidance to explicitly refer to Scottish legislation and minimise the accounting burden on partners; and to develop VAT guidance for both models. Professional guidance on accounting treatment for both models - September Identify potential changes to regulation or legislation required to achieve the policy outcomes Redraft VAT guidance to explicitly refer to Scottish legislation for the "Delegation between partners model". - September 2013 Produce new VAT guidance for both models - September ) Financial recording and reporting Lead Director: Susan Goldsmith, NHS Lothian; Functional experts: Bob Martin, NHS Lothian; Mark Doyle, NHS Fife; LG TBC. SG finance: Julie McKinney & Alan Morrison Consider the implications of each model for NHS Board and Local Authority accounting systems and coding structures and identify potential solutions. Review the financial reporting arrangements and note the revisions required to accommodate each model, for: Local reporting, e.g. Local Authority/NHS Board reports; Central reporting, e.g. LDP, LFR, Cost Book, Manual of accounts; Scottish Government reporting, e.g. Whole of government Account.

4 Professional guidance on recording for both models-september Professional guidance on changes required to reporting arrangements for both models- September ) Financial controls, assurance and risk Lead Director: Sandra Black, Renfrewshire Council; Functional expert: Ewan Murray, NHS Forth Valley; Anne McMillan, Andrea McMahon, Renfrewshire Council SG finance: Julie McKinney. Consider the internal and external audit arrangements required by both models and the implications for the statement of internal control and for obtaining third party assurance. Consider the implications for both models on financial regulations, standing financial instructions (SFIs), schemes of delegation and viring arrangements. Consider the transfer of risk under each model and the implications on the partner s respective risk management strategies and options for insuring for transferred risk. Professional guidance for internal and external audit arrangements and for the SIC and 3 rd party assurance-september Professional guidance for revised financial procedure notes, SFIs-September Professional guidance for risk management arrangements-september ) Financial planning, financial performance management and finance function Lead Director: Paul James, NHS GG&C.; Support: Paul Leak, SG; Colin Crawford, SG secondee. Anne Monk SG Functional expert: Jan Carter, NHS Fife; Paul McMenamin, Scottish Borders Council. SG finance: Julie McKinney. Consider the following issues in relation to the integrated budget: Calculation of the contributions to the integrated budget; Agreeing annual adjustments (including activity changes, cost inflation and efficiency savings); Arrangements for in year budgetary control and treatment of under/over spends; Synchronisation of Local Authority and NHS Board financial planning cycles.

5 Consider the financial management and financial planning implications of the model proposed by the SG for including hospital budgets in the integrated budget and lead the consultation with joint Directors of Finance. Consider the impact of the proposals on the existing capacity and skill sets of partner finance teams and identify development needs. Identify opportunities for efficiencies from closer working between local partnership finance teams. dealing with budget setting and management-september DoF agreement on model for including hospital budgets in the integrated budget-march Advice to support the drafting of Statutory guidance and professional guidance for the model for including hospital budgets in the integrated budget-september Report setting out the development needs for respective finance functions and outlining the opportunities for synergistic efficiencies-september ) Capital and assets Lead Director: Norie Williamson, East Renfrewshire Council; Functional expert: Alison Henry, City of Edinburgh Council; NHS Capital Group rep (tbc) SG finance: Hazel Black. / Mike Baxter Consider, for both models, the implications of transfer of capital assets on Local Authority and NHS Board capital budgets and fixed asset revenue budgets. Consider, for both models, the implications for transferring working capital. Consider the potential that each model offers for rationalisation of Partners asset base and any tax consequences of this. Consider the implications of the proposals for National capital allocations. dealing with capital budget setting and management-september dealing with due diligence for transferred fixed and working capital-september Report on the effect on National capital allocations-september 2013.