Health and Wellbeing Policy Briefings for Leeds

Funding Position for Health and Social Care in Leeds: January 2015

Timeline of events to explain the funding position

22/11/2014

Funding Allocations to Local Government

3/12/2014

19/12/2014

18/12/2014

2015-2020

20??

The Autumn Statement

NHS Five Year Forward View

Funding Allocations to the NHS

The Funding Outlook

Future funding ways of funding

“The NHS needs more money.”

£2bn of additional funding for NHS

How the cuts fall on local councils

How the additional £ is shared out

So what is the financial position for health and social care in Leeds?

How future funding may be structured

NHS 5 Year Forward View

Scenario Annual Productivity Gains

NHS Spending Change by 2020/21 Estimated Annual Funding Gap by 2020/21

1. 0.8% Flat, real terms increase based on GDP growth

£21 billion

2. 1.5% Flat, real terms increase based on GDP growth

£16 billion

3. 2%-3% Flat increase based on population growth Nil

• The NHS faces a funding gap of nearly £30bn a year by 2020/21

• The NHS need to achieve significant efficiency gains

• But more money is needed from government (please)- £8bn extra per year by 2020

The Autumn Statement• Following the requests in the NHS Five Year Forward View, £2bn

additional funding committed by central government

• Of which £1.7bn is additional annual revenue funding

• Funding sourced from bank fines, Treasury and underspends

Funding Allocations to the NHS Where does the money go? Growth for Commissioning Streams

Source: NHSE Board Papers 17/12/2014

Department of Health

Local Government Public Health

Public Health England

NHS England

Other Primary Care Services

CCGsSpecialised

Commissioning

£69,212m £14,634m£13,366m

£100,604m

• £1.5 billion of additional funding to frontline health services including primary care, local clinical commissioning groups (CCG), and specialised services

• £480 million of additional funding used to support transformation in primary care, mental health and local health economies.

• Spending on GP and primary care services will for the first time in a number of years grow in real terms at a higher rate than for other local health services, in recognition of the pressures in primary care

£2,790m

Funding Allocations to the NHS CCG Allocations• In 2013 NHS England went through a long process of calculating how funding to

CCGs should be shared out across the country. CCGs were judged to have a ‘target’ funding amount, based on a complex formula of using demographics and deprivation weightings

West£918,000

North£563,000

South & East£819,000

Leeds - £2.3m, 1.94% growth

• The additional funding for 2015/16 has been distributed to give CCGs who are judged ‘under-target’ a higher proportion of the additional funding.

• In Leeds all 3 CCGs are judged as ‘above target’, which means that they have received the minimum growth in allocations at 1.94%, totalling £2.3m across the city.

• Some of this funding will need to be used to increase funding for local mental health services, winter resilience funding and to account for therecent changes made to how the tariff works for paying for non-elective admissions

Funding Allocations to Local GovernmentNational Picture

Local Government Income against Expenditure 2010/11 to 2019/20

Source: LGA, Future funding outlook 2014

• Local government received confirmation of the financial settlement for 2015/16

• Government figures stated a reduction of spending power for local councils of 1.6%. However, this figure includes the Better Care Fund allocations and other grants, which can be accounted for elsewhere

• By next May, government funding for councils will be 40 per cent lower than it was in 2010

• The LGA estimates that funding gap for adult social care to 2020 is £4.3 billion

Funding Allocations to Local GovernmentLocal Picture

• In 2015/16 Leeds City Council will have £46m less central funding

• This is on top of the £129m that the Council has already lost over the last four years

• There are also funding pressures from inflation, increased demand for our services and shortfalls in grant funding

• As a result Leeds City Council needs to save £76.1m to balance the budget

• Leeds City Council has launched a budget consultation with a link here and a explanatory video on the link below.

So where does this leave us?The funding outlook• Work by the NHS Commissioning Support Unit and Ernst & Young during 2014 identified the financial

challenge in Leeds to be £633m by 2020.

• This is an indicative calculation based on modelling and estimations, but does reflect the scale of the challenge.

Organisation 5 year forecastedshortfall(£’m)

Leeds Teaching Hospital Trust (277.3)

Leeds & York Partnership Foundation Trust (36.4)

Leeds Community Healthcare (31.6)

Yorkshire Ambulance Service (6.1)

Leeds North CCG (24.4)

Leeds South and East CCG (36.9)

Leeds West CCG (30.6)

Leeds City Council (114.9)

NHS England (74.7)

Total Challenge (633.0)

Source: Leeds City Council Executive Board Report, 19/11/2014

• The size of the collective challenge is one of the reasons why a whole system approach is being taken to build a sustainable health and care system.

And what about future funding announcements?

May 2015

Summer 2015

2018/19

2016/17 and beyond

Post-election spending review?

General Election

Multi-year settlements?

Place-based settlements?

Health and Social Care funding will be a major focus point of the election campaigning

A spending review for funding to government departments, including health and social care, beyond 2015/16, will take

place soon after the election

NHS England wants to move towards allocations for clinical commissioning groups and primary care, and potentially the Department’s funding to local authorities for public health,

are combined

NHS England are working towards allocating resources over a number of years, instead of annual allocations to CCGs

Links and Sources of Useful Information• NHS 5 Year Forward View: http://www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-

web.pdf• Autumn Statement 2014: https://www.gov.uk/government/publications/autumn-statement-

documents• NHSE Allocations to CCGs: http://www.england.nhs.uk/2014/12/19/2015-16-allocations/• Local Government Financial Settlement:

https://www.gov.uk/government/speeches/provisional-local-government-finance-settlement-2015-to-2016

• Leeds City Council Budget Consultation: http://www.leeds.gov.uk/council/Pages/our-financial-plans.aspx

• The Barker Commission, ‘A New Settlement for Health and Social Care’: http://www.kingsfund.org.uk/publications/new-settlement-health-and-social-care

• LGA & ADASS, ‘Adult social care funding: 2014 state of the nation report’ http://www.local.gov.uk/documents/10180/5854661/Adult+social+care+funding+2014+state+of+the+nation+report/e32866fa-d512-4e77-9961-8861d2d93238

• Public Accounts Committee ‘Funding healthcare: making allocations to local areas report’ http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/report-funding-healthcare/