There has been a flurry of media comment about the Better Care Fund and associated plans following an article in the Guardian suggesting that the Cabinet Office was calling for a delay in implementation as they were concerned about a lack of detail and credibility in the plans for savings in acute services. Brandon Lewis from DCLG has confirmed that there is no delay, but the underlying problem remains. Essentially the Government is diverting part of the health budget, including £1.9bn top-sliced from CCG allocations for secondary care to go into the fund to support the development of better integrated health and social care in the community. This is with the expectation that this will result in better outcomes and lower usage of acute services, particularly reducing unplanned urgent admissions and visits to A & E.

Given the evidence in the Kings Fund review of admission avoidance schemes Making Best Use of the Better Care Fund (January 2014) there seem to be good grounds for doubting whether such schemes will be immediately effective. However, even if and when they are, the problem then arises of the ability of the acute sector to reduce its overheads to match the reduction in income from the CCGs. The Government is in a difficult position – if it does not proceed there is a significant financial problem for local government to fund its obligations for social care - which are unlikely to diminish under the Care Bill. However if it does proceed, and the schemes are successful then it creates a financial problem for the acute sector that will at best take time to resolve as it either develops other income (from where?) or manages to reduce overheads, which may include the reduction of beds. In the meantime, how do acute hospital trusts meet the financial gap at a time of unprecedented continuing demands for efficiency savings? If the schemes do not succeed, there is no significant reduction in the acute spends, but CCGs will encounter financial problems.

Whilst a magic wand would be useful here, how can the parties find a way out of this? More money for bridge funding would be good, but that seems unlikely to come from Government. So are there other sources?

  • Where Better Care plans have robust and measurable outcomes, there may be scope to look for Social Impact Bonds (SIBs) options in order to fund current activity against predicted and measurable savings later.
  • Are there more innovative solutions to the problems in terms of services to generate savings?
  • Can longer term contracts with providers who are incentivised to take the short term risk with scope for reward in due course be used? CCGs and Councils considering these options need to start planning urgently to develop the metrics and contracting models to resolve this difficult problem.

SIBs are being used in areas of social care, and we have supported local authorities and providers in this field, as well as working on the first example in health for End of Life Care. We also have extensive experience to bear on innovative contracting models to develop risk share. However, given the tribal differences between health and local authorities, it is also important to develop the governance and key relationships between the parties to ensure there are effective ways to work together and resolve the problems that will arise.

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