Posted on: 28 August 2019
This week’s leadership message comes from Jonathan Webb, Lead Director of Finance for the Partnership and Chief Finance Officer for NHS Wakefield Clinical Commissioning Group.
Hello my name is Jonathan
This is my first blog for the Partnership and I thought for those who don’t work in finance, it might be helpful to explain more about the work we do.
I’ve been working in finance for many years and as Lead Director of Finance for the Partnership for the past four months. I’m also the Chief Finance Officer for NHS Wakefield Clinical Commissioning Group.
I’m very aware that describing NHS and Partnership finances can be complex. There can often be a lot of financial jargon. My colleagues and I often talk about different pots of funding with various acronyms and I’m sure that some of it must be confusing for those we work alongside let alone the public. It’s really important that we get better at helping everyone understand the way finances work - this is after all public money, the tax-payers’ purse and we are accountable for every penny we spend (rightly so). How we interpret this matters.
So with this in mind, I thought it may be helpful to give a short whistle stop tour of some of the financial buzz words you may have heard, whether in your day to day working, or via the media.
Firstly, the NHS Long Term Plan and the money attached to this.
In 2018 the government announced that the NHS budget would be increased by £20 billion a year in real terms by 2023/24. In January 2019, the NHS in England published a Long Term Plan for spending this extra money, covering a broad range of areas, including making care better for people with a learning disability, cancer, heart failure and mental health conditions, investing more money in technology and helping more people stay well.
Partnerships like ours, also known as integrated care systems (ICS) and sustainability transformation partnerships (STP), have been tasked with developing a Five Year Plan which will set out how we will achieve the ambitions of the NHS Long Term Plan for the 2.6 million people living across West Yorkshire and Harrogate with the money we have available.
The announcement by the Prime Minister in June 2018 set out additional funding to the NHS; growth is forecast to increase by an average of 3.4% in real terms for the next five years. In recent years, however, demands on services have grown faster than the funding that has been available, and as a result services have come under ever increasing pressure, with many organisations finding it difficult to deliver care within what they have available.
Across West Yorkshire and Harrogate there are still a number of organisations who have underlying planned deficits going into next year and beyond (they are not unique), so while increases in funding are very welcome, some of it is likely to be needed to help restore financial balance. As a Partnership we are doing all we can to make sure we live within our means and to make sure there is enough money to go round to ensure we give people the best care possible – this is after all what we are all about.
Whilst the 2018 announcement of additional NHS funding is very welcome, it will be critical to ensure that additional resources identified for West Yorkshire and Harrogate are deployed in a way that allows us to apply our local discretion in the use of this money to meet local priorities. Put simply, that we can make our own financial decisions.
Although the additional NHS money will go some way to improving the finances of the West Yorkshire and Harrogate care system, it is still important for all organisations to maintain focus on delivering services in the most efficient way. This means that each NHS organisation across the Partnership will still be expected to deliver efficiency targets as it always has done.
The aspiration included in the NHS Long Term Plan is that the scale of these targeted efficiencies will be significantly lower than in recent years, but set against the context of lower than required growth for the last few years – and the fact that many organisations have already had to reduce costs as a result, continuing to deliver efficiencies locally will present a challenge for all our partners.
This is why it is important that we continue the work together within each of our six local places (Bradford District and Craven; Calderdale, Harrogate, Kirklees, Leeds and Wakefield) and across the Partnership to develop different ways of improving services in the most efficient way. We need to move away from the approach of individual organisations identifying more efficient ways of working that help deliver efficiencies for them alone, to one of sharing best practice and working closely together to consider the best way of working across the whole Partnership.
We will continue to focus more on system-wide efficiencies and delivering improvements that benefit people across the Partnership. This will mean considering the total available NHS funding and how it can be best used to deliver the best care possible across West Yorkshire and Harrogate.
As part of this we have reviewed the funding system known as “payment by results”. This system was designed to pay hospitals for each episode of care that they provided, with payments designed to encourage shorter waiting times, a move towards more planned surgery being done as a day case rather than needing an overnight stay, but also reductions in length of stay whenever overnight stays were needed.
This way of working has encouraged individual organisations to focus on their own needs rather than working together with other partners to minimise demand and improve overall population health. We have now moved to a risk-sharing approach to contracting where income is dependent on pre-agreed broader outcomes rather than hospitals being paid on a case by case basis. By sharing NHS information and moving to open-book accounting across the system (where each organisation shares its financial information with each other) the Partnership has a clear understanding of the financial allocations in each place.
All partners have signed a memorandum of understanding that helps describe the way organisations across our Partnership work together, and how and where decisions are made. It builds on mutual trust that has already built up since the Partnership was created in 2016. As long as money is a challenge, difficult choices will still need to be made around where it is best used. In all cases, we will be transparent and honest, and constructively challenge where necessary.
Discussions about how this will work in practise continue to take place at a local and West Yorkshire and Harrogate level, and will form part of an overall move towards greater local autonomy. Our goal is that by demonstrating maturity as a system we will have more access to additional funding, as well as a greater say in how we spend it.
We have already had access to new money called transformation funding (see below) and can decide on how that is spent across the Partnership. We have already seen real improvements in services provided to people as a result.
This is the kind of approach we want to expand upon over the next few years, working together as a successful Partnership.
More recently, it was announced the Partnership will receive £12million of NHS Capital Funding to develop a single, shared Laboratory Information Management System (LIMS) for the area. The funding will be used to deliver a one system wide approach for pathology across West Yorkshire and Harrogate acute hospitals.
The absence of a long term social care settlement combined with demographic and socio-economic pressures on social care budgets, as well as ongoing workforce issues, means that there are significant concerns about the sustainability of social care in our health and care system. There is a causal relationship between decisions made on health budgets and the subsequent costs in social care budgets. A lack of council funding for prevention services, decisions made about healthy environments, housing quality and support services for people with a range of needs and conditions, has a direct link to health spending. We are clear that the future sustainability of social care is dependent on collaboration with the NHS and vice versa.
To help explain a little bit more about the different pots of NHS funding we can access and what we can do with the money, we’ve jotted this down below.
Finally, most importantly, I and my finance colleagues are fully committed to ensuring people in our six local places and the work of the Partnership makes the most of any funding opportunities. We’re determined to make sure we are the forefront of any money coming through at whatever level to ensure we give people the very best care possible. This is a priority to us all.
Have a good weekend,
Jonathan
- Incentive funding – as part of the NHS financial framework, organisations can get additional money if they agree to and deliver a financial position that has been set by NHS England and NHS Improvement. This is called sustainability funding and is available to NHS providers and commissioners. For 2019/20 15% of this funding is now dependent on our Partnership delivering a shared financial position i.e. the sum of all the financial balances of NHS organisations in the system. This encourages us to work much more closely together to maximise funding for the Partnership and the people it serves. There are two types of incentive funding; Provider Sustainability Funding for Trusts and Commissioner Sustainability Funding for commissioners.
- Non-recurrent support funding – since 2019-20 NHS organisations that are forecasting to make a deficit can gain access to a non-recurrent Financial Recovery Fund. This helps support their financial positions in this financial year so they can continue to provide services, but is part of a recovery package where all those in receipt have to demonstrate how and when they will return to surplus.
- Transformation funding – by agreeing to work together as a Partnership to deliver our shared financial target, we are able to access additional money called Transformation Funding. This is then allocated by the Partnership to support the work of its programmes. This can come in two forms: hypothecated transformation funding which is ring-fenced nationally for a specific programme area, and flexible transformation funding where we have the ability locally to determine how and where it is spent.
- Capital – as well as day-to-day expenditure incurred throughout the year (to pay for staff, drugs or clinical supplies, for example), organisations also have to invest in new equipment, IT infrastructure and buildings, and this is known as capital expenditure. Traditionally most of this is funded by organisations using specific money put aside for that purpose, but in recent years the NHS has had access to additional capital which it gains access to through a bidding process. The Partnership have worked collaboratively to maximise the amount of money we can get for this, by prioritising bids that provide the maximum benefit to the system’s populations.
- Control total – for the last few years NHS organisations have been set a financial target to achieve by NHS England and NHS Improvement. Financial incentives have been made available for those that successfully achieve that target.
- Shared control total – rather than individual organisations being incentivised to achieve a control total specific to them alone, a shared control total sums the targets from across the Partnership and a proportion of the individual incentives (15% in the case of West Yorkshire and Harrogate) is now only payable based on the delivery of that joint target.
- Financial recovery plans – describes the plans that organisations in deficit need to take to return to financial balance. Where this isn’t going to happen in just one year, a phased approach will be agreed with annual improvements expected year on year – these annual improvement targets are also known as trajectories.
- Provider – a term used in the NHS to describe organisations that provide services to patients.
- Commissioner – a term used in the NHS to describe organisations that commission services for their populations (and pay providers for the services that they provide).
- Efficiencies / efficiency targets – each year the NHS is expected to reduce the cost of delivering the services it provides, either by making savings on the costs of things it buys, reducing waste, looking for more streamlined ways of working, or seeing more patients without increasing the costs (known as higher productivity). The combined term for all of these things is ‘efficiencies’ and each year NHS organisations have a target amount of efficiencies to deliver in order to achieve financial balance.
- Unwarranted variation – with such a diverse range of communities it is inevitable that many will have specific needs, characteristics or personal circumstances that means there may be differences in the way they are treated for the same condition. These types of variation are referred to as “warranted”, and are considered acceptable in any healthcare system, anywhere in the world. However, whenever these variations are unacceptable or harmful to patients, their families or their carers, this is known as unwarranted variation.
- Risk – anything which may stop an organisation from achieving what it needs to achieve. In a financial sense this could be where efficiencies are dependent on something needing to happen which is not certain to happen or it could be where providers and commissioners have different assumptions about how demand for services may grow in the future.
What else has been happening this week?
System Oversight and Assurance Group
The Partnership’s System Oversight and Assurance Group met on Friday 23 August. This group has been established to take an overview of progress with our shared priority programmes, and to agree collective action to help tackle shared challenges. This month’s discussion included updates on cancer; maternity, West Yorkshire Association of Acute Trusts, unpaid carers and the work of the digital programme.
The group discussed the financial position for the partnership. All NHS organisations were on track with their financial plans after 4 months of 2019/20. However, several key risks to delivery were highlighted which needed to be managed through the financial year.
SOAG discussed a range of performance concerns and agreed where further action was required to tackle them, including the need for further peer reviews and support.
Proposals were also discussed for a transition from routine assurance processes which focus on individual organisations to an approach which focuses on whole places, with the Partnership and regulators working more closely together.
Public consultation: Vascular Services
NHS England North East and Yorkshire launched a public consultation on Wednesday setting out proposals for the future of specialised vascular services in West Yorkshire and is asking patients and the public for their views. Vascular services reconstruct, unblock or bypass arteries and are often one-off specialist procedures to reduce the risk of sudden death or amputation and prevent stroke.
Currently the specialised vascular services in West Yorkshire are delivered from three centres – Leeds General Infirmary, Bradford Royal Infirmary and Huddersfield Royal Infirmary. Based on a need to reduce the number of specialised vascular centres from three to two as identified by Yorkshire and The Humber Clinical Senate, the proposed recommendation being consulted on is that those centres should be at Leeds General Infirmary due to its status as a major trauma centre, and Bradford Royal Infirmary due to its co-location with renal care. The proposals could result in all specialised vascular surgery that requires an overnight hospital stay being transferred from Huddersfield Royal Infirmary to Bradford Royal Infirmary, which would potentially affect up to 800 patients a year.
Dr David Black Commissioning Medical Director for NHS England and NHS Improvement in North East and Yorkshire said: “Under these proposals the majority of patients would continue to access vascular day-case surgery, diagnostics, outpatient appointments and rehabilitation services in local hospitals throughout West Yorkshire. Only the most complex patients who require an overnight stay in hospital after having vascular surgery or radiological vascular intervention would be affected, with these patients receiving treatment at either Leeds General Infirmary or Bradford Royal Infirmary.”
There are three main reasons for the recommended change to services set out as part of the consultation:
Specialised vascular centres must be able to deliver a safe and sustainable service to comply with NHS England’s national service specification.
- There are significant staffing pressures at both the Bradford and Huddersfield centres, and while teams are working very hard to maintain good patient outcomes and deliver the appropriate volume of activity for specialised vascular procedures, the service cannot continue in its current form.
- Calderdale and Huddersfield NHS Foundation Trust and Bradford Teaching Hospitals NHS Foundation Trust currently run a shared out of hours on-call rota for emergency vascular services between the two sites, which is not supported as an acceptable or long-term solution by NHS England or Yorkshire and Humber Clinical Senate.
Vascular surgeon and Regional Clinical Director for Vascular Services across West Yorkshire Mr Neeraj Bhasin added: “Following a process exploring the options, all NHS organisations involved in the delivery of acute hospital services in West Yorkshire accept the proposed recommendation that Bradford Royal Infirmary should be the second vascular centre in our region – and we want vascular patients and members of the public to feedback their views on this preferred option as part of the consultation.”
“Through this opportunity to change the current systems, our aims are to improve the overall sustainability of the vascular service across the whole region, continue to deliver excellent patient outcomes and ensure equality of care to all our patients. As well as delivering better access to care and patient choice, this proposal will significantly help with recruitment and retention and enable us to have more time to develop services and our use of technology so that patients spend less time in hospital.”
To find out more about the consultation on the future of specialised vascular services in West Yorkshire and complete a survey on-line visit: https://
Or to request a copy of the consultation on the future of specialised vascular services in West Yorkshire is sent to you email england.
Members of the public can also attend one of six events in the local community to find out more information from clinical leaders. You can find out more here.