Agenda item

The Board are asked to note the Clinical Commissioning Group’s Medium Term Financial Strategy.

Board members received a report on the CCG’s Medium Term Financial Strategy (MTFS) which sought to outline a plan for how the CCG could reach a balanced and sustainable financial position as well as deliver operational and constitutional targets.

The Chief Financial Officer from the CCG presented the MTFS which covered the period through to 2021. She stated that the strategy sought to articulate the financial plan over the medium term including how to take cost out of the system; address the underlying causes of the CCG’s deficit and identify a path to sustainability.

An evidence based exercise was undertaken that looked at the health needs of the population and a range of benchmarking information including from the Humber, Coast and Vale Sustainability Plan, the NHS England RightCare Programme and local benchmarking.

This resulted in the identification of 6 key opportunities for financial savings that wouldn’t be to the detriment of quality of service or patient safety; these were detailed in section 4 of the MTFS.

The Chair invited the Accountable Officer, NHS Vale of York Clinical Commissioning Group to respond to the questions that had been asked during the public participation section of the meeting. For context around funding and cost of services for 2016/17 he confirmed that the allocation for the 350,000 population of the Vale of York was just less than £450 million allocation. In 2016/17 the cost of care and treatment for this population exceeded this allocation by £28 million. Broadly two thirds of this increase was attributable to the cost of acute care; approximately 20% was attributable to an increase in the cost of Continuing Health Care and the remainder to the cost of mental health services which were either out of the contract held with the provider and/or out of the area.

NHS financial planning cycles are annual and the work NHS Val of York CCG did in preparing for 2017/18 projected an increase in the cost of care and treatment that would exceed the allocation by £44 million; the reasons for this are largely the same as those in 2016/17. GP referrals and attendances at Accident and Emergency are fairly stable however what has been seen is an increase in the complexity and acuity of the patients that present to the hospital. It is therefore far more difficult for the hospital to care for and treat those patients in a way that enables us to stay within our financial allocation. 

The commissioner’s role is to deploy resources based on need; however there are contracts and financial rules in place that mean we are unable to deploy those resources in a way that meets need. They are now deployed on the basis of contractual structure and activity volumes and this is what is leading to the differential between the allocation and the cost.

The CCG prepared its plans for 2017/18 and 2018/19 and the regulators (NHS England) have not accepted the plans because of the increase in cost. The regulators also found that it had similar concerns with the plans that had been developed by Scarborough and Ryedale CCG. Additionally the regulator of the providers (NHS Improvement) has started to work with NHS England to see whether or not they shared a concern about any potential increases in cost in the provider area. The regulators worked together and were concerned about the potential increased risk of cost that they have asked the three organisations to work together to one financial envelope. The Vale of York CCG, Scarborough and Ryedale CCG and York Hospital were now working together to align their financial plans for 2017/18. The regulators have asked the three organisations to submit one plan rather than three plans that contains cost and gives consideration to cost reduction.

It was suggested that the request from Councillor Cullwick for the letter should be made to the regulators as the originators of that.

Councillor Craghill mentioned that there had been a previous commitment from the CCG to engage with the public. She flagged the 6 key areas for cost reduction (section 4 of the MTFS) as well as the CCG’s financial position and asked what the plans were to engage with the public and what the terms of the engagement would be.  It was confirmed that there would be a number of events in the summer covering all of the Vale of York population and the CCG wanted to hear about what works well in the different localities and how they could do more of this. The CCG would also talk about the financial context and wanted people to tell them what was most important to them and their families. The information received would help the CCG think about how they moved forward. It was confirmed that stakeholders would be invited to these events.

The Chair highlighted the need for strong partnership working between all organisations to address the financial situation and acknowledged that the CCG could not do this alone.

Resolved: That the contents of the report and Medium Term Financial Strategy be noted.

Reason: To ensure the Health and Wellbeing Board are aware of the CCG’s financial situation and consider the risk / impact this creates on the health and social care provision.