27.1. The Committee considered a report providing an update on the Clinical Commissioning Groups’ (CCG) and East Sussex Healthcare NHS Trust’s (ESHT) expected financial outturn for 2018/19 and their future financial plans.
27.2. The Committee received a number of responses to its questions from the witnesses in attendance.
Areas targeted for savings
27.3. Jessica Britton, Managing Director, Eastbourne, Hailsham and Seaford CCG (EHS CCG)/ Hastings and Rother CCG (HR CCG), explained that Quality, Improvement, Productivity and Performance (QIPP) savings made by the CCGs are designed to help improve patient care and at the same time make healthcare more cost effective. Jessica Britton provided some examples of QIPP savings for 18/19:
· a programme to ensure that GPs are referring patients to hospital outpatient appointments appropriately using the best possible clinical evidence to avoid instances of outpatient diagnostics being carried out unnecessarily.
27.4. Jessica Britton added that medicine management is an area that can deliver £3-5m of savings per year whilst also providing a better service for patients through, for example, introducing medicine reviews for patients. QIPP savings have been identified in this area.
27.5. Keith Hinkley, Director of Adult Social Care and Health, East Sussex County Council, said that there is a continued commitment in 19/20 towards a comprehensive programme of integration across community health and social care in East Sussex that will help significantly increase productivity and use the available funding more efficiently by managing people in the community; responding more quickly to people in crisis in their own homes; and facilitating speedier discharge from hospital. A report setting this out will go through the governance process of the CCGs and the Council in the next few months.
27.6. Jonathan Reid, Finance Director, ESHT, said that Cost Improvement Plan (CIP) savings are also aimed at providing a better quality service whilst reducing costs. He said CIP savings include:
Risk assessment of savings plans
27.7. Jessica Britton confirmed that the CCGs QIPP schemes all go through a both an Equality Impact Assessment, and a Quality Impact Assessment that are shared with the governing bodies to help them when taking a decision about a proposed QIPP scheme. All QIPP schemes for 18/19 went through this process as will all those for 19/20.
27.8. Jonathan Reid confirmed that the £18m of Cost Improvement Plan (CIP) savings identified by ESHT for 18/19 were risk assessed and represent the total amount of the potential ‘raw savings’ that can be made safely from the trust’s budget.
Risk of controversial plans
27.9. Jessica Britton said that there are no elements of the CCGs QIPP plans that are likely to be controversial. She said that the proposals for 19/20 would be in a similar vein to those of 18/19. If there were any proposed changes to services, they would be discussed with local residents and the HOSC.
27.10. David Cryer, Chief Finance Officer, Central Sussex and East Surrey Commissioning Alliance, added that although the QIPP savings are challenging, they are made in the context of £930m spend across the three CCGs. Within that scale the savings are more manageable.
27.11. Dr Adrian Bull, Chief Executive, ESHT, said that there are no major, controversial plans included in the trust’s 19/20 CIP plans, however, he said it would be rash to assume that any of the Trust’s proposed CIP plans would not cause controversy – even those that have the full support of HOSC. He gave the example that some people would consider that assessing a patient’s social care needs in an intermediate bed rather than in hospital under the care of a consultant is controversial, despite the evidence that it provides better outcomes for patients. He added that any proposed changes to services would include early notification and discussion with stakeholders, including HOSC.
Receiving central funding for achieving financial targets
27.12. Dr Adrian Bull explained that Provider Sustainability Funding (PSF) is only paid to trusts if they reach a control total deficit set by NHS Improvement. For the last two years that PSF has been available, ESHT has been too far from the control total to receive it. He said that the PSF model is changing and will be phased out within two years. Therefore, during 2019/20 some of the money earmarked for PSF funding will instead be put into increasing the tariff paid to hospital trusts for services they provide, and some will be put into a new Financial Recovery Fund (FRF), which will be paid to providers that agree a control total in the form of one-off in-year funding to help maintain financial sustainability. If the Trust achieves its control total in 19/20 it will receive PSF/FRF monies of £24m, making its net deficit £10m.
27.13. David Cryer explained that Commissioner Sustainability Funding (CSF) was introduced in 2018 to help CCGs achieve their statutory duty to break even. The CCGs in East Sussex received £43m of CSF for 18/19 that has enabled the three CCGs to break even. He said that CSF funding is also being removed and is being replaced through an increased initial funding allocation to CCGs. CSF will be £28m for 19/20 and is contingent on achieving the financial plan each quarter. He said that unfortunately this will still leave the CCGs with a deficit of £3.8m at the end of 19/20, as NHS England adjusted the rules for receiving CSF by limiting it to no more than 4% of turnover.
Allocation of additional NHS funding
27.14. David Cryer confirmed that the East Sussex healthcare system has been allocated a portion of the additional £20bn allocated to the whole NHS up to 2023/24. He confirmed that the CCGs’ reduced control total for 19/20 was partly the result of this additional funding.
27.15. Mr Cryer said that the financial planning guidance for CCGs for 19/20 was more prescriptive than in previous years. The guidance requires that a higher percentage of the funding allocation must be spent in community services, mental health services and on the additional funding for the new Primary Care Networks (PCNs). This is a central NHS policy designed to shift resource away from acute care and into support for people in the community. He said that local attempts to focus on community-based care in the past were done in the context of a central NHS policy requiring that resources be spent in acute care to reduce waiting lists, for which much has been done over the past 15 years. He added that the purpose is not to reduce acute spending but constrain demand for it by increasing expenditure in other areas.
27.16. Jonathan Reid said that ESHT will allocate its share of the additional funding to expand the ambulatory care units at both hospitals’ A&E departments to operate seven days per week. This is expected to help meet the expected growth in demand for emergency care.
Cost of borrowing
27.17. Jonathan Reid explained that the Trust holds more than £140m of historical debt to the Government with interest rates varying between 1% and 6%, depending on the period the loans were taken out and the national policy on borrowing at the time. The average interest rate is 3.5%. He said that the Government is currently reviewing whether there is a way of rebalancing NHS trusts’ debt to give a more sensible set of interest rates and repayment profiles.
Workforce challenges and solutions
27.18. Adrian Bull, Chief Executive, ESHT, said that whilst there is a national shortage in certain clinical and nursing roles that affect all trusts, improvements can still be made locally. ESHT has done so by:
27.19. Dr Bull said that the trust’s staff turnover rate has fallen from more than 16% in 2016 to 9.5% (the national rate is 15%); and senior and middle grade doctor positions at both emergency departments are now fully recruited to and all midwife student vacancies have been filled.
Shortage of GPs impacting on trusts
27.20. David Cryer explained that the NHS Long Term Plan has introduced the requirement to develop PCNs in order to enable GPs to share expertise and support each other within a footprint of around 30-50,000 people. PCNs will not solve the GP shortage but will enable practices to alleviate the issue by sharing their resources. It will also enable greater integration with community and social care services based within the footprint of the PCNs.
27.21. Jessica Britton said that PCNs build on work already undertaken in East Sussex to improve primary care capacity in the face of GP shortages, such as encouraging the recruitment at GP practices of paramedic practitioners, pharmacists, and advanced nurse practitioners.
Mergers of the three CCGs in East Sussex
27.22. David Cryer confirmed there was a process of dialogue between the CCGs in the Sussex and East Surrey Sustainability and Transformation Partnership (STP) area. The CCGs’ discussions include the creation of CCGs that better align with the local authority boundaries, and whether East Surrey CCG should move into the Surrey Heartlands STP. These changes could result in a Sussex-wide STP with three CCGs – East Sussex, West Sussex and Brighton and Hove CCG. Any decision would be need to be made by each of the CCGs’ Governing Bodies and they are expected to do so at their Board meetings during June.
27.23. The Committee RESOLVED to:
1) Request the final outturn for the CCGs for 18/19 be circulated by email; and
2) Request a future report on the finalised QIPP plans for 19/20 and an update on proposals relating to CCG governance arrangements.