Integrated Budget Financial Performance

Agenda Item 8

Health and Social Care Integration

Report for the Shadow Joint Board on 22nd May 2014

Integrated Budget Financial Performance

Purpose

The purpose of this paper is to provide the members of the Shadow Board with an update on key financial issues:

The financial performance of NHS Fife and Fife Council for financial year 2013-14 against those budgets currently recognised as potentially being in scope for the integrated budget for Health and Social Care integration.
An update on projected budgets for 2014-15.

Other work in progress

Recommendation(s)

Members are asked to:

a)Note thedraft year-end financial position against those budgets currently identified as potentiallybeing in scope ofHealth and Social Care Integration.

b)Note the potential budgets identified for the Health and Social Care Integration Budget for financial year 2014-15.

c)Otherwise note the contents of the report and other work in progress.

Resource Implications

The Partnership once formally established will be required to produce and agree all services in scope and an associated integrated budget.

Legal & Risk Implications

In developing the Integration Model for Fife, legal advice will be sought and risks will be assessed through the work of the Shadow Board

Impact Assessment

There is no requirement for an impact assessment in respect of this report as no change or revision to existing policies and practices is proposed.

Consultation

Nil

1.Introduction

1.1 The June 2013 Committee of the Shadow Board received a joint paper from NHS Fife and Fife Council on the budgets identified as potentially being within the scope of the Partnership. Updateswere provided to the Shadow Board meeting of 7th March and 1st April 2014.

1.2This paper builds on this to provide a summary on thedraft outturn position for financial year 2013-14, and an update on the current budgets in place for financial year 2014-15 for the services in scope. Fife Council’s 2014/15 revenue budget was approved on 13th February 2014. NHS Fife opening budgets were approved at the Board meeting at the end of March 2014.

2.Financial Performance 2013/14 to Date

2.1Financial Performance for the year – NHS Fife.

2.1.1For those budgets identified by NHS Fife as potentially being within the scope of the Partnership budget, a statement on the anticipated outturn for both Fife Council and NHS Fifeis shown in Appendix 1. This shows that in total, NHS Fife is overspent by £0.603m for these services by the year-end.

2.1.2The main areas of overspend are as follows;

Kirkcaldy and Levenmouth CHP – overspend £0.385m.
The overspend within the CHP relates to the cost of Rheumatology drugs attributed to service demand (£0.876m). Theoverspend is offset by underspends in core Mental Health Services,Business Managementand Nurses in Training.
Acute Elderly Medicine – overspend £0.767m

The overspend within the Acute Elderly Medicine Service is due to additional bank nursing costs essential to cover sickness absence,and additional capacity and some supplies overspends but also associated with additional capacity to meet demand.

2.2Financial Performance for the year – Fife Council.

2.2.1The financial position for those services within Fife Council defined as being in-scopeis also shown in Appendix 1. For Social Work, the draft overspend for the yearis£4.099m,for the services in scope,but note that this has not yet been reported to Committee.The main areas of overspend are as follows:

2.2.2Adults Services - draft overspend £1.674m.

The draft overspend within Adult Services relates in the main to overspends on

(a) Care & Assessment Teams (£0.556m) due to transport of clients,

(b) Third Party placements (£0.970m) arising from increased levels of assessed demand,

(d) Occupational Therapy (£0.203m) due to lack of staff turnover and the joint equipment store,which were partially offset by underspends in Day Centres (£0.594m) and Accommodation with Care & Support (£0.546m), mostly due to management of staff vacancies, and an underspend onEmployability (£0.234m) due to increased recognition in the accounts for Work Choice funding.

2.2.3Older People Services – projected overspend £2.425m.

The overspend within Older People’s Service is mainly due to an overspend in home care (£4.224m) due to 977 full year equivalent external care packages compared to a budget for 486 full year equivalent places and an overspend on budget on Homecarers and agency staff pay. This is offset by the release of Fife Council’s Older People Change Fund monies (£2.876m) resulting in a net overspend for home care of £1.348m. In addition there is a shortfall in the reshaping social work programme saving of £1.487m. These overspends are offset by an underspend in Local Authority Residential and Day Care mainly due to income and staffing (£0.401m) and other underspends in Older People (£0.009m).

2.2.4Housing and Neighbourhood Services

The financial position for Housing Services is that Commissioned Housing Support and Housing Adaptations spend was close to budget, recognising that the underlying pressure on demand for adaptations has been recognised by the Council and is currently subject to review by the Executive Committee. The Housing Adaptations budget contains an element from HRA

3.Budgets for 2014/15

3.1Integrated Budget

3.1.1The June 2013 report to Shadow Board members set out the potential budgetsconsidered in scope for the integrated budget. Attached in Appendix 1 is an update on thesame budgets for financial year 2014/15.

3.1.2Fife Council budgets do not include central support service overheads or a reallocation of the budget for Social Work Resources Division, which is effectively the internal support service of Social Work. The budget figures therefore reflect the direct costs only of the functions and services in scope, including premises costs.

3.1.3The budgets identified within NHS Fife are direct clinical budgets only. Budgets recognised as overheads or support services are held as separate Corporate Services budgets out-with those budgets identified as being in-scope.

3.2Services in Scope – Fife Council

3.2.1All services currently provided by the Adults Service and the Older People Service continue to be considered in-scope.

3.2.2The in-scope Housing Sector services have been agreed by the Shadow Board in January 2014 as those currently providing support and care and are registered with the Care Inspectorate, and housing adaptations.

3.2.3Areas that are identified as not being in scope at this stage are Children and Families and Criminal Justice Service.

3.3 Services in Scope – NHS Fife

3.3.1As previously reported, all services currently managed directly through the three CHPs in NHS Fife are currently defined as potentially being in-scope. The Elderly Medicine service within the Acute Services Division is also included.

3.4 Change Fund

3.4.1NHS Fife will receive a non-recurring allocation funding of £4.899m in 2014/15relating to the Change Fund. This resource will be used in-year to support a number of additional programmes, including Re-ablement, Integrated Care Assessment and Support Services (ICASS), Telecare, CommunityCapacityBuilding and a number of other smaller projects. The disbursement of these funds for 2014/15 will be agreed between Health and Social Care partners through the work of the Partnership Management Group.

4.Comparison of Budgets

4.1Comparison of 2014/15 Budget to 2013/14 Budget – NHS Fife

4.1.1Appendix 1 shows that the budgets across all three CHPs and Acute Elderly Medicine have reduced at the start of the new financial year compared to this financial year. However, this reflects the nature of some NHS funding which is received from SGHSCD and allocated in-year on a non-recurring basis.

4.2Financial Planning – NHS Fife

4.2.1The opening budgets were approved at the Board meeting at the end of March 2014. These opening budgets reflect the Boards opening Revenue Resource Limit and change throughout the year as additional allocations are received or reductions applied.

4.2.2An overall increase includes the following elements:

A basic uplift of 2.7% which has been applied for all Territorial Health Boards;
An additional £4m for movement to NRAC parity. Whilst the increase is similar to the 2013/14 NRAC Parity adjustments, it would still leave NHS Fife some £2m short of overall Parity based on the 2014/15 model. The NRAC remodelling has had a significant reducing effect on NHS Fife’s parity share.
A reduction of £0.700m in respect of the Change Fund.
Included within the revised plans are the following assumptions concerning uplifts to existing budgets in 2014/15:

Pay Awards – in line with Public Sector pay recommendations, a 1% uplift in Pay Scales has been assumed along with a £300 uplift for staff earning less than£21,000.
Existing Drugs / Direct Medical Supplies – both areas have been given a 4% uplift to cover both basic price inflation and the cost of new or substitute alternatives, and activity driven increases.
Energy – based on current information about energy contracts fromNational Procurement a 10% uplift has been included.
General Supplies – a 1% uplift has been included.
Voluntary Organisations – a 1% uplift has been included.
Resource Transfers – an estimated 2% uplift is included in line with national recommendations.
Other Non NHS Agreements – this is largely payments to Fife Council which have been uplifted by 2% but will be reviewed in line with historic Resource Transfer Agreement.

4.3Comparison of 2013-14 Budget to 2014-15Budget – Social Work

4.3.1Social Work Service

4.3.2As shown in appendix 1, the budget for the Adults and Older People Services within the Social Work Service has increased by £2.483m from £132.563mm for 2013-14 to £133.046m for 2014-15.

4.3.3The indicative budget for 2014-15 includes uplifts for pay awards (1%), changes in National Insurance and pensions, payments to external care providers, etc. The 2014/15 budget includes additional investment and budget savings planned in previous years’ budget cycles.

4.3.4The main movements in budgets are the additional investment of £2.000m made by Fife Council, a decrease in the Adults Services budget of £0.086m and an increase in Older People Service budget of £0.570m. This is primarily due to a planned prior year budget saving on adult care packages and a reduction in Fife’s Council’s change fund offset by inflation for employee costs and payments to external care providers. The Council’s Older People Change Fund budget of £2.163m has been transferred from Older People Service – East & West & Senior Manager to Home Care.

4.3.5Housing Services

4.3.6The budgets for the elements of Housing Services that are considered to be in scope of the Partnership are still subject to further analysis and verification.

5.Other Work

5.1 Scottish Government has recently issued Integrated Resources Advisory Group guidance.Members of the Finance Work stream are currently reviewing these to develop specific Financial regulations/guidance which can be adopted by the Integrated body in Fife. These will subsequently be brought to the Integrated Board for adoption.

6. Conclusions

6.1Work is continuing to review and update the budgets relating to the services which are determined as “in-scope” and to develop local financial guidance.

BRIAN LIVINGSTON CHRIS BOWRING

Executive Director (Finance & Resources)Director of Finance

Fife CouncilNHS Fife

Fife HouseHayfield House

GLENROTHESKIRKCALDY

15.05.14

List of Appendices: Appendix 1: Projected outturn variance 2013/14 and baseline budgets 2014/15