ITEM 13 2024-25 Delegated Health and Social Care Budget
North Lanarkshire Council · 27 March 2024
Back to Health and Social Care Integration Joint Board — 27 March 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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1 REPORT Item No: 13 SUBJECT: 2024-25 Delegated Health and Social Care Budget TO: Integration Joint Board Committee Lead Officer for Report: Ross McGuffie, NL HSCP Chief Officer Author(s) of Report Amanda Kilburn, Chief Finance Officer DATE: 27 March 2024 1. PURPOSE OF REPORT 1.1 This paper is coming to the Integration Joint Board (IJB) For approval For endorsement For noting 1.2 This report describes the financial allocation and budgets made available to the Integration Joint Board (IJB) for 2024/25 by North Lanarkshire Council and NHS Lanarkshire. 2. ROUTE TO THE INTEGRATION JOINT BOARD 2.1 This paper has been: Prepared By: Chief Finance Officer ☒ Reviewed By: Chief Officer ☒ Endorsed By: ☐ 3. RECOMMENDATIONS 3.1 It is recommended that the IJB: (1) Agree to accept the delegated social care budget for 2024/25 in section 9.4 subject to any final adjustments in relation to recurring budget adjustments in March 2024; (2) Agree to accept the delegated health budget for 2024/25 in section 10.4 subject to: any final adjustments in relation to recurring budget adjustments in March 2024; and any further funding allocated by the Scottish Government. (3) Approve a drawdown of reserves, if required, in order to fund any shortfall in funding for 2024/25 and (4) Approve increases to the IJB’s contingency reserves in 2024/25, in order to protect the financial resilience of the IJB. (5) Acknowledge both NHSL and NLC have passed through full budget uplifts when they have been received from Scottish Government. 4. VARIATIONS TO DIRECTIONS Yes No N/A
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2 5. BACKGROUND/SUMMARY OF KEY ISSUES 5.1 North Lanarkshire IJB is a legal entity in its own right and is accountable for the stewardship of public funds and ensuring that its business is conducted under public sector best practice governance arrangements, including ensuring that public money is safeguarded, properly accounted for, and used economically, efficiently, and effectively. 5.2 The budget delegated by our two partner bodies, is used by the IJB to commission services, which are delivered by North Lanarkshire University Health and Social Care Partnership (UHSCNL). The principles of the funding allocated by the two partner organisations is set out in the Integration Scheme, however, utilisation of this funding is delegated to the IJB. 5.3 Under the terms of the Integration Scheme, partner organisations should make appropriate arrangements to fund pay awards, contractual uplifts, the impact of demographic changes and determine efficiency targets as part of their respective budget setting processes. 5.4 The role of the Chief Finance Officer (CFO) for the IJB includes both the adherence to professional standards as well as compliance with the Local Government (Scotland) Act 1973. For the IJB this includes the requirement to ensure a balanced budget is set. 6. CONCLUSIONS 6.1 This report sets out the implications of the Scottish Government budget for 2024/25 and provides an overview of the IJB’s budget allocation for 2024/25. 6.2 Over the medium term, significant uncertainty remains, and the IJB will require to continue to plan for a wide range of potential scenarios. During the past number of years, the IJB has taken a medium-term view of its financial position, agreeing transformation and redesign which have ensured a balanced budget year on year. However, the continuing rise in costs and demand, continues to provide uncertainty resulting in challenging times for services and the need for ongoing review and realignment of future transformation and savings plans. 6.3 In this context, it is more than likely that we will need to draw on the financial flexibilities available to the IJB to provide non-recurring support to balance the annual revenue budget position each year over the medium-term. 7. SCOTTISH GOVERNMENT BUDGET 2024/2025 7.1 On 19 December 2023, the Scottish Government published their budget for 2024/25. Included within the budget was the continued commitment to health and care staff who deliver front line services by increasing adult social care workers in the third and private sectors to £12 per hour for those in a direct care role. For North Lanarkshire, this amounts to additional funding of £13.771m. 8. SUMMARY OF 2023/24 BUDGET POSITION 8.1 As reported throughout this financial year, the IJB will deliver an underspend on its core budget. The IJB reported underspend at the end of December, takes into account the ongoing challenges in terms of recruitment and retention across all service areas and the drawdown of non-recurring reserves. These are issues that are being faced by IJBs across Scotland.
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3 8.2 The landscape in relation to additional funding streams released throughout 2023/24 by Scottish Government to a number of priority areas is exceptionally complex with continued uncertainty around the scale and timing of the funding. There is however a commitment by Scottish Government to allocate 80% of ring-fenced funding in the first quarter of 2024/25 which will help to address this issue going forward. 9. DELEGATED SOCIAL CARE BUDGET 2024/25 9.1 Similar to 2023/24 and as previously highlighted, demographic, and socio-economic factors continue to drive significant demand and cost pressures for 2024/25 relating to: Funding for pay awards. Cost pressures arising from contractual arrangements which are subject to renewal. Financial impact of the negotiated application of the increased living wage across the sector. Increases associated with the National Care Home Rate (NCHR) contract. Ongoing pressures on home support service in relation to costs associated with shifting the balance of care, supporting people to live safely at home for as long as possible and facilitating prompt discharge from hospital. Increasing investment in self-directed support packages required to support adults and carers to achieve improved outcomes and live independently. 9.2 Using a range of informed assumptions, the CFO has estimated that the demand and cost growth for social care services in 2024/25 linked to the areas highlighted above, is likely to be in the region of a gross increase of circa £26m, including the increase to the living wage. 9.3 At its meeting on 15 February 2024, North Lanarkshire Council approved a recurring net uplift to the social care budget of £12.138m. 9.4 The following table provides a summary of the indicative social care budget 2024/25 from North Lanarkshire Council: 9.5 The CFO recommendation to the IJB is, to note and accept the delegated social care budget offer from North Lanarkshire Council for 2024/25 subject to any final adjustments in relation to recurring budget adjustments in March 2024. 10. DELEGATED HEALTH BUDGET 2024/25 10.1 Similar to social care, demographic and socio-economic factors continue to drive significant demand and cost pressures for our delegated health services in 2024/25 including: Pay inflation and the impact of agenda for change. Inflationary cost pressures across service level agreements on non-pay budgets. Prescribing cost, volume, and short supply impact. Social Care Budget 2024/25 £m Opening Budget 193.710 Delegated Services 2.646 Uplift Scottish Living Wage 13.771 Adjustments to Prior Years Funding from Scottish Government (1.633) Total 2024/25 Budget 208.494
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4 10.2 Using a range of informed assumptions, the CFO has estimated that the demand and cost growth for health services (not including Set Aside) in 2024/25 linked to the areas highlighted above, is likely to be in the region of a gross increase of circa £11m. 10.3 As no additional uplift to budgets were received from Scottish Government against mainstream budgets, the NHS Lanarkshire indicative opening budget offer for 2024/25, remains the same as the closing budget in 2023/24. It is anticipated that a formal budget offer will be issued following NHS Lanarkshire board approval. 10.4 The following table provides a summary of the indicative health budget 2024/25 from NHS Lanarkshire: Health Budget 2024/25 £m Mainstream Budget 310.786 Set Aside Budget 74.577 Total 2024/25 Budget 385.363 10.5 The CFO recommendation to the IJB is, to note and accept the delegated health budget offer from NHS Lanarkshire for 2024/25 subject to any final adjustments in relation to recurring budget adjustments in March 2024, and any further funding allocated by Scottish Government during 2024/25. 11. FINANCIAL PLAN 2024/25 11.1 The long term financial plan reflects the economic outlook, adopting a strategic and sustainable approach linked to the delivery of priorities in our Strategic Commissioning Plan. These strategic priorities will continue to provide a focus for future budget decisions, where the delivery of core services must be balanced with the resources available. Our financial plans and reserves strategy focuses on financial sustainability, acknowledging the uncertainty around key elements and the need to redirect resources to support the delivery of key priorities. 11.2 The long term financial plan has estimated recurring funding pressures of circa £23m for 2024/25. A two year savings target will be introduced to address these pressures primarily focusing on reducing costs by a mixture of efficiencies, redesign, and management actions. Regular tracking and reporting of savings targets will be reported to the board through the quarterly financial monitoring reports until full implementation has been achieved. 11.3 It is recognised that service redesign and savings plans take time to implement therefore, to mitigate the risk to the IJB, contingency reserves may be needed to fund the gap until the full savings can be realised. 12. IMPLICATIONS 12.1 NATIONAL OUTCOMES People are able to look after and improve their own health and wellbeing and live in good health for longer ☐ People, including those with disabilities or long-term conditions, or who are frail, are able to live, as far as reasonably practicable, independently and at home or in a homely setting in their community ☐
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5 People who use Health and Social Care Services have positive experiences of those services, and have dignity respected ☐ Health and Social Care Services are centred on helping to maintain or improve the quality of life of people who use those services ☐ Health and Social Care Services contribute to reducing health inequalities ☐ People who use Health and Social Care Services are safe from harm ☐ People who work in Health and Social Care Services feel engaged with the work they do and are supported to continuously improve the information, support, care, and treatment they provide ☐ Resources are used effectively and efficiently in the provision of Health and Social Care Services ☒ 12.2 ASSOCIATED MEASURE(S) Each partner is required to remain within their approved budgetary provision. 12.3 FINANCIAL This paper has been reviewed by Finance: Yes No N/A 12.4 RISK ASSESSMENT/RISK MANAGEMENT The strategic financial risks detailed in the IJB Risk Register have also been updated and are included in a separate report to the IJB. Relevant Risk Register Details Current Risk Level Risk Owner Financial Challenges High Amanda Kilburn National Set-Aside Budget High Ross McGuffie Hosted Services Medium Ross McGuffie Prescribing Activity and Costs Very High Ross McGuffie Third and Voluntary Sector Low Ross McGuffie Ineffective Governance Arrangements Medium Ross McGuffie 12.5 ENGAGEMENT & PARTICIPATION Please tick the engagement and participation objectives that link(s) with this piece of work and provide further details on the engagement and participation that was undertaken. Objectives Further details ☒ Involve stakeholders in the development work aimed at achieving the national outcomes The Director of Finance of NHSL and the Head of Financial Solutions of NLC both continue to be consulted on the financial position of the NL IJB. ☐ Provide stakeholders with information on how to get involved ☐ Ensure a diverse range of engagement and participation and opportunities are in place to suit different needs ☐ Measure how well we involve community stakeholders in the planning, design, and delivery of our services
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6 ☒ Provide regular feedback on how stakeholder engagement and participation is shaping and influencing service development and delivery Financial information is shared with stakeholders on a regular basis and is provided to the PFA and IJB on a quarterly basis. ☒ Provide support to enable stakeholder representatives to participate meaningfully and confidently at meetings ☐ Develop participation guidelines to ensure a common understanding and set of expectations for both stakeholders and partnership staff ☒ Support engagement planning and participation in localities, taking account of other engagement activity and local plans across the Community Planning Partnership IJB Financial Plan and Reserves Strategy aligns and supports the IJB Strategic Commissioning Plan to ensure robust financial monitoring and scrutiny. 12.6 INEQUALITIES & FAIRER SCOTLAND DUTY Equality and Diversity Impact Assessment Completed & Fairer Scotland Impact Assessment Form Completed: Yes No N/A 13. BACKGROUND PAPERS None. Chief Finance Officer Members seeking further information, please contact Amanda Kilburn on 07816 126362.