Medical Service Increment for Teaching (SIFT) Funding Report

Medical Service Increment for Teaching (SIFT) Funding Report May 2007

Introduction Concerns have been raised that funding flows for medical education are not transparent. In undergraduate medical education, however, it is critical to ensure that adequate funding is available for exposure to the clinical environment, since it is essential for medical students to acquire practical knowledge as a key component in their transition from undergraduate students to registered doctors. In recent times, pressures on how undergraduate medical education can be delivered, and in particular on how this clinical exposure can be provided, have increased. Factors which have contributed to this include the increase in the number of medical students, the decline in the numbers of medical academics (which may itself be linked to funding flows) and financial pressures within the National Health Service (NHS). 1, 2 For some time the British Medical Association s (BMA) Medical Academic Staff Committee (MASC) has been expressing these concerns. This report examines the main funding flows, and then focuses specifically on one key aspect, the Service Increment for Teaching (SIFT) allocation and spending in England. A desire to understand how SIFT funding is spent by recipient trusts led MASC to request information on SIFT funding via the Freedom of Information Act in August 2006. The results of this exercise are examined in detail in the second part of this report. Funding arrangements for medical education Government funding for medical education is provided by the Higher Education Funding Council for England (HEFCE) and the National Health Service (NHS). Broadly, HEFCE funding is used to support the direct costs of medical education in university medical schools and the NHS funding, (via the Department of Health and Strategic Health Authorities) provides the service facilities to support that teaching. It is argued that University Teaching Hospitals are more costly to run than non-teaching hospitals. 3 HEFCE funding HEFCE is responsible for allocating and distributing a large portion of the funding used by Higher Education Institutions (HEIs) and is the largest single source of income for the higher education sector. HEFCE uses formulae to determine how most of the money is allocated between institutions. The formulae take into account a range of factors for each institution including the number of students and their socio economic and demographic characteristics; the subjects taught by the institution; and the amount and quality of the research undertaken. HEFCE then distributes the money to institutions in the form of a block grant which institutions can spend according to their own priorities providing that it is used to support teaching, research and related activities. NHS funding Since 1975, the Department of Health (and its predecessors) have provided a cost subsidy to compensate hospitals for the excess costs incurred due to the additional workload resulting from the presence of students. 4 This cost subsidy, known as the Service Increment for Teaching (SIFT), now forms part of the Multi Professional Education and Training (MPET) levy which consists of four elements: Medical Service Increment for Teaching (Medical SIFT) Medical and Dental Education Levy (MADEL) Dental Service Increment for Teaching (Dental SIFT) Non-Medical Education and Training (NMET) Medical Service Increment for Teaching (SIFT) Funding Report 1

MPET funding is allocated to Strategic Health Authorities (SHAs) at the start of each financial year (although money for new training posts, particularly for postgraduate doctors, may be allocated inyear). The SHAs then act as paymasters for the Workforce Development Confederations (WDCs) who have a central role in enabling the delivery of SHA s plans through planning and development of the healthcare workforce, working with Postgraduate Deaneries to commission education and training, and managing the Department of Health annual investment in training. The remit of the WDCs is to provide leadership and direction to workforce planning and development, and to manage the Multi-Professional Education and Training budget and other relevant budgets. 5 Whereas grant income and tuition fees are paid to medical schools via HEFCE, SIFT is paid directly to SHAs for them to distribute to NHS units providing the service facilities for teaching i. The Chief Medical Officer is the national budget holder for SIFT and medical SIFT budgets are managed by SHAs. In 2006, the Department of Health gave SHAs devolved responsibility for the management of budgets, including MPET, which had previously been allocated to NHS organisations centrally by the Department of Health. 6 Further, the research element of SIFT (SIFTR) is set to move out of MPET in the longer term. In December 2006, the government accepted a recommendation that the component of the MPET budget that is used to support the training of clinical academic staff should be transferred to the Department of Health Research and Development (R&D) budget, ring-fenced and used specifically for this purpose. 7 In 2007-2008, a data collection exercise was being undertaken to identify the patient care money used to fund staff time spent on research with a view to adjusting PCT Patient Care Funding allocations and transfer to the ring-fenced Department of Health s R&D budget. 8 Medical SIFT The medical SIFT supports the additional costs incurred by NHS organisations in providing clinical placements for medical undergraduates in England, but it is not a payment for teaching. It is designed to be paid in addition to income gained by medical schools for teaching medical students. It has two key purposes: to ensure that the NHS supports undergraduate medical education and to ensure a level playing field for health care contracting between providers who support undergraduate medical education and others. 9 The original rates for SIFT were calculated by the Resource Allocation Working Party report 10 and the report of the 1980 advisory group, 11 to be 75% of the estimated median excess cost per student. The 1988 review of the RAWP formula 12 replaced the original SIFT programme with a service increment for teaching and research (SIFTR). The current arrangements for medical SIFT were introduced on 1 April 1996 in line with the Winyard report. The changes were designed to give a more flexible system, with improved accountability and to provide a framework within which changes can evolve. It was to be accounted for separately from other income streams and be applied solely to support the costs of undergraduate medical education. A key change was the split of medical SIFT funds into separate budgets for clinical placements (linked to the number of students in the final three years of the undergraduate course) and for facilities to support training (no longer directly linked to student numbers). 13 Hence, medical SIFT comprises two elements which fund facilities and clinical placements: i In Wales, the Higher Education Funding Council for Wales receives its resource from the Welsh Assembly Government, which is also responsible for funding SIFT. There are similar arrangements to SIFT in Scotland through the Additional Cost of Teaching payment (ACT) and in Northern Ireland with the Supplement for Teaching and Research (STAR). 2 Medical Service Increment for Teaching (SIFT) Funding Report

Facilities funding accounts for around 80 per cent of the medical SIFT allocation. For established medical schools, this is largely historic with the addition of growth obtained under the medical workforce standing advisory committee third report and the NHS Plan expansion programmes. Facilities funding for the four new medical schools (Hull/York, University of East Anglia, Brighton/Sussex and Peninsula Medical School) is based on costings produced as part of a competitive bidding exercise and obtained from recent spending review settlements. Clinical placement funding (20 per cent of medical SIFT) is based on a unit cost of 10k for London and 9k for outside London which are applied to annual estimates received from medical schools of numbers of graduates expected to be in the last three years of their degree courses. In 2005/06 placements were funded for just over 16,000 medical undergraduates. Allocations of SIFT are based on the product of the annual SIFT rate and the number of whole time equivalent students who are in the last three years of the five year curriculum, which are traditionally the years of clinical teaching. 14 The Winyard report advocated a move away from a per capita funding allocation to a system that distributes funds based on demonstrated costs, as medical schools calculate student load in different ways leading to regional variations. However, identifying and extracting the costs associated with supporting undergraduate medical education is a difficult task, as one care episode may lead to several outputs. For example, a consultant s combined teaching and clinical ward round which uses a patient who is part of a clinical trial, can simultaneously involve patient care, undergraduate teaching, research and postgraduate education to junior clinical staff. 15 The Department of Health acknowledges that they do not know how SIFT is used in most recipient teaching hospitals. 16 The last accountability report for the SIFT was published by the Department of Health in 1999/2000 17 and there are no plans to publish further reports. ii Funding flows Whilst NHS funding, allocation, and expenditure is more opaque than HEFCE funding, the Department of Health acknowledges that they have very little idea of how the money allocated to SHAs for medical SIFT is spent. The 1999/2000 SIFT accountability report (and the reports for the two years prior to 1999/2000) included information on the budget allocations by region, the allocation methodology and the distribution of SIFT contracts. In the period since, no such information has been made available in England. In Wales, however where the Welsh Assembly Government is responsible for the SIFT allocation process on a similar basis to that undertaken in England, the most recent accountability report covers the year 2005. It appears from the information available, that there are few limitations placed on HEIs regarding how they spend the funding allocated from either HEFCE or the NHS. Audit and accountancy requirements that are in place for all public sector institutions, including HEIs, mean that there should be strict protocols in place to ensure that such money that is ring- fenced for specific departments and or purposes is spent in accordance with the restrictions in place. However, anecdotal evidence suggests that NHS funding for undergraduate medical training, among other areas, has ended up in a central contingency fund; for example that which was created to pay for NHS overspends deficits in the 2006-07 financial year. 18, 19 It has been acknowledged that in practice it is often difficult to know where NHS clinical services end and university teaching begins, ii Confirmation by email from Department of Health information line April 2007. Medical Service Increment for Teaching (SIFT) Funding Report 3

but without ring-fencing, SIFT funding is potentially at risk of being inserted into the big NHS melting pot. 20 Increasingly, pressure on quantifying the costs involved and improving transparency with regard to funding flows will be critical to ensure that medical education is delivered to the appropriate standard. Methodology In August 2006, a Freedom of Information (FOI) Act request was sent by the BMA s Medical Academic Staff Committee to a sample of university hospital trusts in England, asking them to provide an account of SIFT expenditure. In particular, trusts were asked the following: The amount of SIFT money the trust had received over the last five years. How the SIFT money was spent over the last five years. How much of the SIFT money was spent on academic teaching sessions by hospital consultants over the last 5 years. How much of the SIFT money was spent on accommodation for medical students over the last five years. Of the 33 trusts approached, responses were received from 23 trusts. Responses received varied considerably in the extent to which the required information was provided for each of the 4 questions listed above. Most responding trusts provided some form of information in response to the FOI request sent, whilst others provided partial responses and requested payment to extract the remaining information. Ten of the 33 trusts approached did not respond with any of the required information (listed in Appendix A). The following is a summary of the information received from responding trusts. Amount of SIFT money received Trusts were asked to provide details of the amount of SIFT funding received for each of the previous five years. Most of the respondent trusts provided the amount of SIFT money received for each of the five years since 2002/03. Table 1 (Appendix B) lists the average amount of SIFT funding over a five year period according to trust. This SIFT funding includes both facilities and placement funding and is for medical SIFT funding only. Expenditure of SIFT monies Trusts were asked to account for how the SIFT allocation had been spent in each of the last five years. Around half of respondents (10/23) could not account for how their SIFT funding had been spent over the last five years and report that they are unable to provide explicit details on the expenditure of the SIFT income because of the nature of its use and dissemination throughout the trust. Many respondents report that SIFT funding has historically been incorporated into the baseline budgets of the trust and the spending of this money is not recorded separately by the trust. As one respondent trust suggests, this income [SIFT] constitutes part of the totality of the trust s income base and therefore is embedded within the totality of the trust s expenditure. SIFT covers both direct and indirect costs of providing undergraduate teaching. These costs may include tangible costs such as the cost of space utilised for teaching students while they undertake their clinical placements, through to intangible costs such as the impact that teaching has on productivity, such as slower ward rounds. Whilst less than half of the respondents could provide any detailed account of SIFT expenditure, a few respondents (3/23) only reported that SIFT funding had broadly been spent on clinical teaching, support staff and infrastructure. 4 Medical Service Increment for Teaching (SIFT) Funding Report

The remaining respondents (10/23) detailed the expenditure of their SIFT funding over the past five years to include a range of areas. To summarise, areas of expenditure include: Placement/manpower costs-both direct and indirect staff costs Operational costs-library, student accommodation, equipment, administration Physical costs-teaching facilities in clinical and non-clinical areas Payment of ILS, ALERT and simulation training for Year 5 students Purchase of IT equipment and support Live data link from hospital theatres to lecture theatre Occupational health services for students Individually arranged consultant sessions for different divisions Staffing and equipping new buildings for teaching purposes Clinical Skills Centre iii Upgrading/refurbishment of teaching/seminar rooms Few respondents appear to have rigorous auditing or governance structures in place with regard to SIFT funding. Exceptions include those with a trust based Undergraduate Committee with representatives from each course and directorate (Nottingham University Hospitals Trust), a joint SIFT Steering Group to oversee the use of SIFT (University of Oxford, Oxford Radcliffe Hospitals Trust and Health Authority representatives) or the Integrated Directorate of Education and Learning (IDEAL- Southampton University Hospitals Trust) Expenditure on academic teaching sessions by hospital consultants Trusts were asked to indicate how much of their SIFT allocation had been spent on academic teaching sessions by hospital consultants in each of the last five years. Less than a third of respondents (7/23) could provide details of SIFT expenditure on academic teaching sessions by hospital consultants. Several respondents stated that nominally all of their consultants had one programmed activity (PA) funded for teaching, which covers both undergraduate and postgraduate teaching. In some cases, trusts report a mutually beneficial, knock for knock relationship, whereby some university staff undertake clinical work for the hospital and hospital staff are engaged in teaching and education. Expenditure on accommodation for medical students Trusts were asked to indicate how much of their SIFT allocation had been spent on accommodation for medical students in each of the last five years. Several respondents acknowledge that SIFT funding contributes generally towards the cost of accommodation for undergraduates to reflect that the trust accommodation needs to be larger than it otherwise would be to enable undergraduates to be housed. However, in most cases this cost could not be separately identified in expenditure reports. Less than a third of respondents (7/23) provided details of SIFT expenditure on medical student accommodation. Among those that could provide this information, details were limited to an annual amount for the five year period. In most cases, identified expenditure included teaching facilities and/or student on-call/residential accommodation. Specific examples include an on-call room for use by students on-call overnight in the hospital (Nottingham University Hospital Trust) and 30 single room bedsits (Coventry & Warwickshire University Hospital Trust). iii Oxford Radcliffe Hospital Medical Service Increment for Teaching (SIFT) Funding Report 5

Recommendations SIFT is critical to medical education funding in the UK. However, it is clear that the lack of accountability regarding SIFT expenditure means that little is known about how the funding is spent once allocated to trusts. The information provided by individual trusts provides a less than full picture and highlights the need for the process to be more transparent, if SIFT is to fulfil its original purpose of ensuring that the NHS supports undergraduate medical education and ensures a level playing field for health care contracting between providers that support undergraduate medical education. It is crucial that SIFT funding exists in perpetuity and recipient trusts must be able to account for how the money is spent. Furthermore, accountability measures must be introduced to ensure that SIFT funding is spent directly on medical education. There is an opportunity to increase transparency in the funding of medical education, as the research component of SIFT will no longer form part of the MPET budget in the future. It is recommended that: The annual accountability SIFT reports last published in 1999/2000 should be reinstated. These reports should be submitted to the Chief Medical Officer and published. Teaching should be given greater recognition within the NHS, regardless of whether undertaken by clinical academics, NHS consultants or general practitioners. Given the long term importance of medical education to the future of the NHS workforce, consideration should be given to returning the MPET budget to being a direct allocation of the Department of Health, to ensure that funds for medical education are used for the purpose for which they are intended. 6 Medical Service Increment for Teaching (SIFT) Funding Report

Appendix A Respondent trusts Aintree Hospitals NHS Trust (part response) Central Manchester & Manchester Children s University Hospitals NHS Trust (part response) Pennine Acute Hospitals NHS Trust (part response) Chelsea & Westminster Healthcare NHS Trust, London Hammersmith Hospitals NHS Trust, London (part response) St Mary s NHS Trust, London Derby Hospitals NHS Foundation Trust Nottingham University Hospitals NHS Trust Guy s & St Thomas NHS Foundation Trust, London (part response) Newcastle Upon Tyne Hospitals NHS Trust South Tees Hospitals NHS Trust (part response) Oxford Radcliffe Hospitals NHS Trust Royal Free Hampstead NHS Trust, London University College London NHS Foundation Trust Sheffield Teaching Hospitals NHS Foundation Trust Southampton University Hospitals NHS Trust St George s Healthcare Trust, London The Leeds Teaching Hospitals NHS Trust (part response) United Bristol Healthcare NHS Trust University Hospitals Birmingham NHS Foundation Trust University Hospitals Coventry and Warwickshire NHS Trust University Hospitals Leicester NHS Trust Non-respondent trusts Brighton and Sussex University Hospitals Trust Cambridge University Hospitals NHS Foundation Trust Royal Devon and Exeter NHS Foundation Trust Hull and East Yorkshire Hospitals NHS Trust King s College Hospital NHS Trust London The Royal Liverpool and Broadgreen University Hospitals NHS Trust South Manchester University Hospitals NHS Trust Norfolk and Norwich University Hospitals Trust Plymouth Hospitals NHS Trust North Staffordshire Hospitals NHS Trust Great Ormond Street Hospital for Children (not applicable as they don t receive SIFT funding) Medical Service Increment for Teaching (SIFT) Funding Report 7

Appendix B Table 1 SIFT allocation according to respondent trusts Trust 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 Aintree Hospitals NHS Trust 2,809,000 2,904,000 3,780,000 3,593,000 3,783,000 *Central Manchester & 14,940,000 16,210,000 18,567,000 19,751,000 20,506,000 Manchester Children s University Hospitals NHS Trust Chelsea & Westminster Healthcare 12,577,149 13,218,585 13,602,558 13,895,389 13,950,423 NHS Trust, London Derby Hospitals NHS 1,447,600 2,381,100 4,194,000 7,280,600 10,840,400 Foundation Trust Guy s & St Thomas NHS 26,900,000 28,900,000 30,500,000 33,200,000 34,300,000 Foundation Trust, London Hammersmith Hospitals NHS 14,605,000 16,439,000 16,513,000 15,918,000 14,666,000 Trust, London Newcastle Upon Tyne Hospitals 17,764,123 19,020,888 19,993,800 21,785,788 22,118,064 NHS Trust Nottingham University Hospitals 8,253,305 8,886,934 9,246,943 9,462,176 10,077,286 10,490,590 NHS Trust Oxford Radcliffe Hospitals NHS Trust 11,878,138 12,412,826 13,191,413 14,616,413 15,017,700 Pennine Acute Hospitals NHS Trust 2,458,135 2,487,106 2,579,130 Royal Free Hampstead NHS Trust, London 19,375,855 18,494,795 17,791,955 17,170,815 16,171,476 Sheffield Teaching Hospitals NHS 18,489,500 19,773,300 21,276,600 21,814,200 22,836,100 Foundation Trust South Tees Hospitals NHS Trust 1,350,200 1,350,200 1,649,900 1,901,000 1,901,000 Southampton University Hospitals NHS Trust 17,730,409 18,437,390 20,442,472 21,251,102 20,199,519 St George s Healthcare Trust, London 18,388,000 19,540,000 21,534,000 22,347,000 20,898,000 St Mary s NHS Trust, London 13,210,000 13,797,000 14,500,000 15,025,000 15,237,000 *The Leeds Teaching Hospitals NHS Trust 26,651,022 28,255,670 29,796,200 30,901,760 32,045,824 United Bristol Healthcare NHS Trust 14,249,000 15,372,000 15,535,000 15,705,000 University College London NHS Foundation Trust 20,810,000 20,350,000 University Hospitals Birmingham NHS Foundation Trust 11,830,038 11,753,897 12,767,116 13,243,832 13,767,003 University Hospitals Coventry and Warwickshire NHS Trust 897,000 1,428,000 5,196,000 7,120,000 7,791,000 University Hospitals Leicester NHS Trust 16,376,960 17,273,780 20,925,160 21,970,190 *includes medical and dental funding 8 Medical Service Increment for Teaching (SIFT) Funding Report

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, British Medical Association, BMA House, Tavistock Square, London, WC1H 9JP www.bma.org.uk British Medical Association, 2007 CODE: BMA 48653 / AJG / HP&ERU / MAY 2007