“Full speed ahead” for renamed Accountable Care Systems and more harsh Sustainability and Transformation Plan financial controls

NHS England’s new planning guidance for 2018/19 tells Accountable Care Systems, Sustainability and Transformation Partnerships, Clinical Commissioning Groups and NHS providers how to update their 2 year operational Sustainability and Transformation Plans that NHS England required in December 2016, and that were the object of sustained protests by NHS protectors.

Full speed ahead for Accountable Care Systems (now called Integrated Care Systems)

Although in public NHS England is saying ‘Delay Accountable Care Organisation contracts blah blah’, and  ‘Accountable Care Organisation contracts consultation blah blah’, their planning guidance says ‘Double quick march.’

The headlines say one thing, the small print says another.


Please ask your local Sustainability and Transformation Partnerships, Health and Wellbeing Board, Clinical Commissioning Group and Hospital what exactly the new planning guidance and financial allocation means for them. You can find #NHS4All Campaign resources and support from 999 Call for the NHS here.

The new  planning guidance:

  • Greatly increases the role and powers of Sustainability and Transformation Partnership /Accountable Care System leaders – who have no statutory existence and so are utterly unaccountable to the public and our elected politicians.
  • Gives a shove to the first wave Accountable Care Systems that are to go live in April 2018.
  • Tells the next wave of ACSs to form an orderly queue and that the quangos will decide on their applications by March 2018.
  • Extends the process of harsh financial control totals from individual NHS organisations to the whole Accountable Care System.
  • Requires system-wide planning.
  • In the case of broke Clinical Commissioning Groups, offers new Sustainability Funding with “activity moderation incentives” strings attached. In other words, bailing them out if they cut their contracts with providers and reduce patients’ access to care.
  • Directs “extra” NHS money for elective care to private hospitals.

Updates to the 2 year operational STP plans must be based on

“clear triangulation between commissioner and provider plans and related contracts to ensure alignment in activity, workforce and income and expenditure assumptions –and with assurance from STP leaders that this is the case whilst ensuring the updated plans and contracts are aligned between commissioners and providers.”

(Is this business about “updated contracts…aligned between commissioners and providers” about the new Aligned Incentives Contract? And what is that exactly? And how close is the System Control Total to the Whole Population Capitated payment mechanism in the Accountable Care Organisation contract, that is currently the subject of the 999 Call for the NHS Judicial Review that will be heard on April 24th in Leeds?)

UnAccountable Care System Leaders have more powers

The new planning guidance requires system-wide financial control totals,  with Accountable Care System Leaders in charge of determining how this is attained, giving them considerable powers over the whole area’s NHS and social care organisations – including  “intervention powers” in individual NHS organisations.

Where is the legislation that permits this?

The NHSE Board paper for their meeting on 8th Feb says:

“The refreshed planning guidance also signals ‘full speed ahead’ for the deeper care redesign, population health and community engagement work set out in the Forward View and being led by Integrated Care Systems. It sets out new system incentives and flexibilities available to the first group of ICSs that ‘go live’ in April, and invites applications from other areas to join the next group of ICSs. For those parts of the country not covered by ICSs, the guidance lays out the important role of STP leadership in reviewing and supporting system working between organisations as 2018/19 plans are finalised.”

“Fully-developed system control total incentive structures”

The first wave ACSs plus the two devolved health and social care systems in Greater Manchester and Surrey Heartlands must prepare a single system plan with a system control total imposed by NHS England and NHS Improvement. These first wave ACSs are:

  1. Frimley Health including Slough, Surrey Heath and Aldershot
  2. South Yorkshire & Bassetlaw
  3. Nottinghamshire, with an early focus on Greater Nottingham and the southern part of the STP
  4. Blackpool & Flyde Coast, with the potential to spread to other parts of the Lancashire &
 Cumbria STP at a later stage
  5. Dorset
  6. Luton, with Milton Keynes and Bedfordshire
  7. West Berkshire, covering Reading, Newbury and Wokingham
  8. Buckinghamshire.

The system control total is the spending limit for the whole system. These Accountable Care Systems can juggle individual NHS organisations’ control totals within the system, so that with the quangos’ approval they can vary them in order to take money from Peter to pay Paul. Or alternatively to reconfigure the local health and social care services.  They will not receive any Sustainability and Transformation Fund dosh if the whole system doesn’t keep within the system control total spending limits.

If the Accountable Care System as a whole limits its spending to the system control total but individual NHS organisations within the system don’t stick to their control totals, their Sustainability and Transformation funding will be split between the other commissioners and providers within the Accountable Care System, with agreement between the two quangos and the ACS leadership.

ACS leadership to assume “intervention powers” in individual NHS organisations

This seems to give a lot of power to the ACS leaders – basically the STP leaders under a new name. Where is the legislation that permits this?

The planning guidance calls this an “incentive structure.” It says that ACSs that adopt this “full incentive structure” will

“operate under a more autonomous regulatory relationship with NHS England and NHS Improvement.”

This includes allowing the ACS leadership to assume “intervention powers” in individual NHS organisations that show “financial underperformance” or quality issues, by “playing a key role in agreeing…remedial action.”

So these new local NHS and social care organisations are being cut loose from the NHS in significant ways. The planning guidance calls this “fully -developed system control total incentive structures” and all approved ACSs will have to operate them by 2019-20.

NHS England decisions on second wave Accountable Care Systems in March 2018

The planning guidance tells Sustainability and Transformation Partnerships that want to be part of the next wave of Accountable Care Systems (renamed Integrated Care Systems) to send their applications to NHS England and the quangos will decide on their applications by March 2018.

Is your STP applying to become a second wave Accountable Care System?

New Commissioner Sustainability Fund

There is a new £450m Commissioner Sustainability Fund, for Clinical Commissioning Groups that would otherwise be in deficit this financial year. This comes with “activity moderation incentives” strings attached. In other words they get the dosh if they cut patients’ access to care which, in turn means paying providers less.

There is also a revised Quality Premium scheme for Clinical Commissioning Groups that includes

“an incentive on non-elective demand management.”

In other words, reducing patients’ use of acute and emergency care.

The new Planning Guidance says that all this means

“it is now more critical than ever that activity and finance plans are aligned between commissioners and providers.”

“Sustainability Funding” to balance commissioners and providers’ budgets in exchange for acceptance of harsh spending limits

Overall the new planning guidance looks like more of the same cuts and privatisation rigmarole, with an update about how they’re spending the extra

“£1.6 billion announced in the Autumn Budget in November 2017, and a further £540 million that the Department of Health and Social Care (DHSC) has subsequently agreed to make available.”

If you take it at face value, the extra funding amounts to a 2.4% increase in real terms compared to 2017/18. Once the growing and ageing population is factored in, age-weighted revenue growth per person 1.4% in 2018/19.

Obviously, it’s not enough – the new planning guidance says:

“CCGs, providers and STPs will have to make considerable efficiency improvements and other savings”

In other words, cuts. The basic deal is that NHS England is telling hospitals and commissioners they will get “sustainability” funding so they can keep within their “financial control totals” ie spending limits – but this is not enough to sustain current activity levels while “balancing their budgets”, so the commissioners and hospitals have to cut what they’re doing for patients if they want to access this “sustainability” funding. And if they don’t “accept” their financial control total and the deal that comes with it, the Accountable Care System leader has “intervention” powers and will do it for them. It is a VERY DIRTY TRICK.

Adding to the air of quiet desperation, the Dept of Health refuses to say where this “further” £540m is coming from, leading to speculation that this is mostly not new NHS money but just money shifted from one spending heading to another. £220m may come from increased NHS charges to migrants. The HSJ reporter Lawrence Dunhill tweeted his suspicions that the rest is interest charged on trust loans being recycled back into current spending.

“Sign the control total or else” approach – we’re stuffed

Some outspoken but anonymous NHS managers are not happy about plans for spending nearly half of the extra £2.4bn to make sure CCGs and hospitals run balanced budgets in 2018/19,  since this requires the NHS organisations to accept and stay within harsh spending limits – aka Financial Control Totals. Otherwise they will not get the extra Sustainability Funding that will plug the hole in their finances caused by government underfunding.

Basically this amounts to the government starving both NHS commissioners and providers of money and then saying, here, you can have a bit more but if you don’t accept the strings attached you get nowt. This is so wrong. The government and its quangos are acting like loan sharks – and with money that’s ours, not theirs, to add insult to injury.

There’s no extra money for winter planning, and achieving the A&E target is abandoned for 2018/19.

One anonymous NHS manager raged in the Health Services Journal online:

“The control total I have received,and the implications of its rejections, confirm the system is now morally as well as financially bankrupt.”

A bit of detail: out of the extra £2.4bn, £640m will be added to the existing £1.8bn Sustainability and Transformation Fund bringing it to £2.45bn. This is because:

“At the end of Q2, the provider sector was forecasting an aggregate full year deficit for 2017/18 of £623 million, after taking account of the existing £1800 million Sustainability and Transformation Fund.”

They are now calling this £2.45bn the Provider Sustainability Fund, to distinguish it from the new Commissioner Sustainability Fund of around £400m. This  is for Clinical Commissioning Groups with an NHS England financial allocation that would put them into a deficit in 2018/19. The Commissioner Sustainability Fund is meant to  enable them to run a balanced budget.

Funding 5 Year Forward View ‘Next Steps’

The remaining £1.35bn out of the “extra” £2.4bn is to go on 5 Year Forward View ‘Next Steps’ changes to mental health, cancer, primary care and other national priorities.

Every Clinical Commissioning Group will have to make sure mental health spending grows faster than its overall funding growth,  to pay for expansions next year in children’s and adolescents’ mental health services, crisis and emergency mental health care, talking therapies, etc.

The cancer funding package is to pay for completing the national upgrade of radiotherapy machines, faster diagnostics including for lung, prostate and colorectal cancers, and a new bowel cancer screening programme.

Primary care funding is for the 2018/19 GP Forward View commitments including development of primary care networks covering 30,000- 50,000 populations. Bye bye traditional GP practices. And the GP forward view investment in estates and IT. Hello big GP hubs further from home and lots of new data innovations that are going to be essential for introducing Accountable Care models and payment mechanisms – currently subject to the 999 Call for the NHS Judicial Review.

Bonanza for private hospitals

There is increased money for “NHS-funded” elective care, meaning pots of money will go to private hospitals to carry out elective care for NHS patients, instead of letting them be treated by their own hospitals.  What’s left of the extra funds will go on:

“a substantially bigger annual increase in NHS-funded elective operations than in recent years.”

Note the “NHS-funded” – this means a bonanza for private hospitals carrying out elective operations for NHS patients, paid by the NHS.

More dosh for Big Pharma

Expensive new drugs and devices are going to cost more than planned due to price inflation, leading to “pressures on specialised commissioning” – including the cost of new drugs likely to receive NICE approval. So more dosh is to be sucked out of the NHS by profiteering Big Pharma.

They still aim to achieve “a substantial programme of planned efficiencies”. So what specialised services are they going to cut?

Here is the NHSE Planning Guidance 2018-19

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