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1 Nhs Leeds West Ccg Financial Due Diligence

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1 Nhs Leeds West Ccg Financial Due Diligence Appendix 3 NHS LEEDS WEST CCG FINANCIAL DUE DILIGENCE REVIEW FOR ADOPTING DELEGATED COMMISSIONING OF PRIMARY MEDICAL SERVICES 1.0 SUMMARY 1.1 The aim of this Primary Care co-commissioning financial due diligence review is to ensure that the CCG is prepared for adopting full delegated commissioning of primary medical care functions from NHS England, and to assure the Governing Body that the following points have been addressed: The financial implications and risks for the CCG understood from becoming fully delegated. The staffing capacity required by the CCG to cover the management of the new contracts. The financial implications from not co-commissioning Primary Medical Services. 1.2 Upon approving the move to fully delegated commissioning an agreement will need to be drawn up between the CCG and NHS England to clearly explain the responsibilities and risks that each organisation would hold in the new arrangement. 2.0 FINANCIAL IMPLICATIONS OF FULLY DELEGATED 2.1 The key points for the Governing Body to consider are The information available to CCGs is now more detailed at a practice level, which will enable us to forecast the costs more accurately and further clarity is being sought from NHS England on the areas where in detailed figures are required. NHS England are currently forecasting that in 2015/16 NHS Leeds West CCG (LWCCG) will be on balance with the resource allocation of £41.976m. NHS England have suggested that several services could come in under budget, but further clarification needs to be sought on these. These services were PMS Premium, QOF, Enhanced Services and Premises, which could represent around £500k in savings. 2.2 Cost pressures from NHS England’s planning assumptions are Overall expenditure should be more than the allocation in 2016/17 but from 2017/18 there is a potential financial surplus of between £100k- £300k, although if the public health allocation isn’t made recurrent then there would be a shortfall each year. NHSE colleagues have advised this can be assumed to be recurrently available. 1 NHS Leeds West CCGs list size growth in the last 2 years has ranged from 0.6% to 1.2%. As NHSE’s planning assumptions are based upon growth of 0.8% this could represent around a risk of around £110k in year 1. There is also a risk around the PMS Review which is being carried out to ensure equitable funding between PMS and GMS practices. This should represent a saving for the CCG in 16/17 to 18/19, but a potential cost pressure from 19/20 onwards. Premises cost growth funding of 1.2% had originally been assumed by NHS England when normal growth would be around 2-3%. 3% has been built into our assumptions as the potential financial risk of this would be £51k to £114k for the CCG in the first year. The business rates that GP practices are charged on premises has been legally challenged recently. This has resulted in the Local Authority having to repay back some of the business rates collected. These fees are going directly to Central Government, however the CCG’s should see the benefit in unspent allocation going forward. There is a risk that this allocation could be withdrawn if these business rates are no longer charged. 3.0 IMPLICATIONS FOR STAFFING RESOURCE 3.1 The CCG has informally contacted Yorkshire and Humber CCGs who have already moved to full delegation to understand the potential impact on teams and individuals due to the increased responsibilities. Teams where there is an anticipated impact include: Finance/Contracting Primary Care Governance (Quality and Risk and corporate Committee support) 3.2 The CCG will continue to work with citywide colleagues to review processes and systems to understand what functions could potentially be delivered collaboratively across the City to prevent duplication and ensure value for money. 3.3 NHS England are continuing to look at staff resource and have established a Co-commissioning HR working group. Recent guidance advises that the roles and resources for primary care commissioning roles remain within NHS England. 3.4 Three employment models are incorporated in the delegation agreement with a set of supporting documents. The three models are: 1) Assignment – NHS England staff remain in their current roles and locations but provide services to CCGs that have been granted full delegation on the basis of a memorandum of understanding between the CCGs and NHS England. 2) Secondment – NHS England staff are formally seconded to CCGs that have been granted full delegation 3) Direct employment - CCGs create new posts within their organisations however are obliged to make NHS England staff aware of the 2 opportunities and guarantee an interview where the applicant meets the person specification Locally we will be allocated a “relationship manager” from NHS England to work with all three Leeds CCGs. The conversation need to continue with our NHS England colleagues as to the future working relationship as it becomes clearer as to the status of fully delegated co-commissioning across West Yorkshire. 3.5 Current staffing budgets are being reviewed internally as to whether flexibility remains within existing staffing budgets that could be utilised to support increase responsibilities. 3.6 Currently the CCG is operating below its full running cost allocation. We will continue to ensure that this flexibility is retained to support Co-Commissioning and potentially increase premises costs. However this needs to be considered in the context of potentially reduced running costs. 4.0 FINANCIAL IMPLICATIONS OF NOT GOING FULLY DELEGATED 4.1 NHS England West Yorkshire Local Area Team currently manages the primary care budgets for 10 CCGs and they have a responsibility to balance WY expenditure against budget. If NHS Leeds West CCG were to remain at Greater Involvement, then the CCG would be at risk of overpaying for Primary Care services due to having to pay part of other CCGs’ overspends. 4.2 NHS Leeds West CCG currently receives the minimum allowable level of growth on its element of the Primary Care Allocation because the West Yorkshire local area team are 3% over target, despite NHS Leeds West CCG being 3% under target. 4.3 If NHS Leeds West CCG moved to delegated budgets, and the allocation growth was decided at a CCG level then it could potentially mean a greater level of allocation growth. 4.4 NHS Leeds West CCG would not have complete control over how the primary care budget is spent. With QOF and enhanced services being locally agreed the CCG would have little decision making power unless fully delegated, at which point the CCG would be able to use this money to develop services locally. 4.5 CCGs might not see the benefit of rates incorrectly charged to GP Practices because if the allocations stay with NHS England these might be distributed across CCG’s to cover overspends elsewhere. 3 5.0 DETAILED FINANCIAL REVIEW 6 year plan 5.1 The below 6 year projection shows the expected funding shortfall/surplus over the next 6 years to 2020/21. 5.2 2016/17 shows a shortfall, mainly because of the potential full year impact of premises reimbursements and enhanced services which are underspending in 2015/16. Leeds West CCG Allocation & Expenditure Allocation £'000 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Recurrent GP allocation 41,759 42,260 42,767 43,280 43,800 44,325 Recurrent Public Health allocation 217 217 217 217 217 217 Total Allocation 41,976 42,477 42,984 43,497 44,017 44,542 Expenditure £'000 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 GMS 5,750 5,909 6,008 6,111 6,217 6,326 PMS 21,698 21,391 21,361 21,358 21,604 21,951 PMS premium reinvestment 150 299 171 150 0 0 QOF 3,938 3,985 4,033 4,082 4,131 4,180 Enhanced Services 2,551 2,899 2,933 2,969 3,004 3,040 Other 1,585 1,635 1,654 1,674 1,694 1,714 Premises 6,269 6,457 6,651 6,850 7,056 7,268 Collab Fees (contingency & QIPP) 36 36 36 36 36 36 Total Expenditure 41,976 42,610 42,847 43,229 43,741 44,516 Funding (Shortfall)/Surplus 0 -(133) 137 268 275 27 Allocation 5.3 The resource allocation from NHS England to NHS Leeds West CCG for Primary Medical Services is £41.976m recurrent, with a £0.2m non-recurrent public health budget. As mentioned in (4.2) above the West Yorkshire (WY) local area team are currently over target all West Yorkshire (WY) CCGs are subject to the lowest level of allocation growth. 5.4 Despite West Yorkshire being 3% over target, NHS Leeds West CCG are 3% under target and, should the growth be applied at a CCG level in the future following delegated commissioning, LWCCG could see higher levels of growth. The levels of growth applies in 2014/15 and 15/16 were; 14/15 – Min 1.6% growth. Av 2.14%, Max 3.01% 15/16 – Mix 1.2% growth. Av 1.70%, Max 2.44% 5.5 The above table has been based on NHS Leeds West CCG getting the current lowest level of growth (1.2%) for the next 6 years. It also applies the assumption that the non-recurrent public health allocation will become 4 recurrent in 2016/17. Please note the entire methodology for CCG/NHSE allocations is being reviewed so these positions could change. 5.6 Current Expenditure 2015/16 expenditure for NHS Leeds West CCG is currently forecast to be £41.976m, which is on budget with the 15/16 allocation.
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