Agenda item

6.1

6.2

6.3

6.4

6.5

6.6

6.7

6.8

6.9

6.10

The Committee received a presentation from Julia Newton (Director of Finance – Sheffield Clinical Commissioning Group) on how money flowed in the NHS and Financial Planning for 2019/20. Also in attendance was Eugene Walker (Executive Director, Resources – Sheffield City Council)

The NHS was the 2^nd largest recipient of public money.  The financial settlement for the (Clinical Commissioning Group (CCG) had only just been received, therefore the CCG was still working through the implications.  Work was ongoing to determine priorities for funding and levels of achievable efficiencies.

Financial frameworks for CCG’s were very tight.  At the end of the financial year, the CCG must break even and balance the books.  Every year started with no reserves.  There was a historic reserve amount of £18m that was held by the Government that the CCG had no access to.  In addition, the CCG was not permitted to own buildings or access capital, hold cash reserves or carry funding forward into a future financial year.

Three separate allocations were received by CCG’s – Programme (to commission services); Primary Care (for GP core contracts and related spend) and Running Costs (for administration).  NHS England allocated increases differentially dependent on position against ‘fair share’ target allocations.  Currently, Sheffield CCG was nearly 5% above its target allocation.

Sheffield CCG’s 2018/19 allowances had been as follows:

·         £783m for Programme (this included £12m as host for South Yorkshire and Bassetlaw Integrated Care System)

·         £77m Primary Care

·         £13m Running Costs

In 2018/19, the CCG was currently on track to deliver the breakeven requirement, but there were risks.  It was estimated that £16m of the £18.5m efficiency target would be met.  The main investments had been around mental health and primary care services and cost pressures were mainly in urgent hospital care.

The allowances for 2019/20 were as follows:

·         £805.733m for Programme

·         £82.473m for Primary Care

·         £12.643 for Running Costs

Pressures for the CCG were similar to the rest of the country and included:

·         An ageing population

·         A rise in long-term conditions

·         A reduction in funding and increasing costs of providing care

·         Increase in hospital activity and demands for  long-term care

·         Waiting time pressures

·         New technology and treatments

Members of the Committee raised questions and the following responses were provided:-

·         New contract arrangements would be in place for 2019/20 to try to work with hospitals to reduce the amount of people in hospital beds.  It was part of the Government’s requirements that in CCG areas, GP Practices and neighbourhoods work together to create economies of scale and provide a more cohesive service to the population.

·         Hospitals had real cost pressures and it was important to try to understand flows and where it was best to focus.  Funding flowed from the CCG to the local authority for mental health care.

·         Hospitals linked to the Sheffield Strategy and in some areas would make a loss e.g. care of the elderly, due to national pricing.  It was an inefficient system and income could be grown in other ways e.g. changing the use of beds.

·         GP Practices were run as businesses and had a special route for capital funding and another for primary care.  Hospitals had their own route and built up cash via depreciation of assets.  They could also access PFI.

RESOLVED: That the Committee:-

(a)        notes the presentation now submitted, together with the responses to the questions now raised; and

(b)        thanks Julia Newton for attending the meeting and responding to the questions raised.