Agenda item

26.1     The Board considered a report providing an update on the East Sussex Better Together (ESBT) financial position.

26.2     In response to questions from the Board the following information was provided:

·         Hospital care costs have inflated by 7% during 2017/18. The increase is a result of changes to the Payment by Results (PbR) tariff; specifically changes to the re-charge codes that are applied to different types of hospital treatments. These codes are set at a national level.

·         It is clearly understood that there is a need to move towards place-based budgets as part of an integrated health and social care model. PbR, however, will continue as the mechanism to account for local activity and funding flows of healthcare in the Sussex and East Surrey Sustainability and Transformation Partnership (STP) area.

·         It is understood from the first year of the ESBT Strategic Investment Plan (SIP) that investment in transformed services that reduce demand on the system has to be matched with cost reductions within providers. The current regulatory regime of NHS Improvement, however, is encouraging trusts in financial special measures – which includes East Sussex Healthcare NHS Trust (ESHT) – to increase their income at the cost of the rest of the system.

·         Within this financial and regulatory regime, there will be opportunities to agree different local financial arrangements. The ESBT Alliance is in the process of work to identify and agree a single plan for the health and social care system that will help to align the incentives of commissioners and providers and address the deficit.  During January 2018, key ESBT projects will be identified where investment can be made into them that will draw down demand for care elsewhere. At the same time, plans will be developed to reduce costs in the secondary care system and address the inflation issue.

·         The southern region is the first in England to recruit a Regional Integrated Director role for NHS Improvement and NHS England. The Regional Integrated Director is designed to help integrate the two regulators, however, the legislation underpinning them requires that they remain two separate organisations with separate budgets.

·         The ESBT area went from a ‘challenged health economy’ area in 2012/13 to both CCGs delivering surplus control totals across four years. The deterioration in the financial situation, therefore, is from this surplus control total to the current projected outturn for 2017/18, and the relative financial position is similar to other CCG areas. The regulator’s concern is whether management and understanding of the costs that have led to the deterioration can be demonstrated.

·         The challenge for the ESBT area is that the financial risk has crystallised during the financial year. This is in contrast with the Brighton & Hove area that had an agreed control total of £65m deficit at the beginning of the financial year. This meant that the regulators had expected their financial system would go into deficit during the year.

·         Primary care is a building block of ESBT. GP Practices, according to the NHS Five Year Forward View, should receive £3 per patient but the ESBT primary care strategy will provide £13 per head of investment this year. A similar level will be invested going forward, meaning that the proportion of the healthcare budget that primary care receives will increase from 8.5 to 12% by 2021. At the same time, GP practices will be encouraged to demonstrate value for money, longer opening hours, and speedier access to GPs. A process of federating GP practices is being encouraged to support these changes.

26.3     The Board RESOLVED to:

1) note the East Sussex Better Together (ESBT) system financial position and scale of forecast outturn variance;

2) note that we are working closely with our NHS regulators, NHS England (NHSE) and NHS Improvement (NHSI) to ensure there is complete transparency and understanding of the position and mitigating plans in the remaining months of 2017/18 and into 2018/19;

3) endorse the recovery actions being developed and implemented collaboratively through the ESBT structures, including the financial planning framework for 2018/19; and

4) request an update on the ESBT primary care strategy.