Tighter controls on Better Care Fund cash could ‘destabilise’ councils, warn experts

Local authorities will see cash from the Better Care Fund used to compensate NHS services if local integration initiatives fail to cut emergency admissions, the government has announced.

The move was set out in a revised implementation plan for the £3.8bn fund – a pooled budget between councils and the NHS – announced by Department of Health (DH) and Department for Communities and Local Government (DCLG) over the weekend.

The changes will place tighter controls on the £1bn of Better Care Fund cash that is being allocated to local areas to spend on out-of-hospital services. Under the plans, local health and wellbeing boards will agree local targets for reducing emergency hospital admissions. The government has set a ‘guideline’ target of a reduction in admissions of at least 3.5%.

A portion of the £1bn Better Care Fund cash will then be linked to local areas’ performance against this target. If the local targets are not met, the balance will be used to support NHS-commissioned services, as agreed by the local health and wellbeing boards, the DH and DCLG said.

Announcing the move, health secretary Jeremy Hunt said: “Local authorities and the NHS are making excellent progress in developing plans that will give patients better, joined up care and allow hospitals to focus on treating the people who really need to be there. The plans are packed full of ideas and show that strong partnerships are being forged with different teams like never before.”

Dr Judith Smith of the Nuffield Trust said it was positive that the government had listened to concerns raised about the impact the fund could have on hospital finances in 2015-16, but warned that the revisions to implementation could place further financial strain on councils.

“Because this latest change to the Better Care Fund requires local authorities to transfer money back to the NHS if emergency admissions are not reduced, it is likely that they will find themselves on the hook to hand up to £1bn back to the health service in a single year,” she said.

“This will come just as local authorities are using money transferred from the NHS to put in place new services for frail older people at risk of being admitted to hospital. It has the potential to be hugely destabilising for local authorities, when they are already under intense financial pressure. The Government is right to be looking to boost out-of-hospital care to manage demand on the NHS. But extensive evidence shows that this kind of change takes time. Expecting any savings in the short-term is looking increasingly unfeasible.”

The DH said that 80% of Better Care Fund plans were on target to improve ‘out of hospital’ services. NHS England and the Local Government Association have also identified 14 areas that can fast-track the completion of their plans “because they are already showing high potential”. These are:

• Dudley
• Hammersmith and Fulham
• Kensington and Chelsea
• Westminster
• Greenwich
• Leeds
• Liverpool
• Nottinghamshire
• Reading
• Sunderland
• Rotherham
• Torbay
• Warwickshire
• Wiltshire