Value for Money Strategy and Savings Proposals
Argyll and Bute Council · 29 March 2023
Back to Argyll and Bute HSCP Integration Joint Board (IJB) — 29 March 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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1 Integration Joint Board Agenda item: Date of Meeting: 29 March 2023 Title of Report: Value for Money Strategy and Savings Proposals 2023/24 Presented by: James Gow, Head of Finance and Transformation The Integration Joint Board is asked to: Approve the Value for Money Strategy and Savings proposals for 2023/24. Note that the HSCP budget is predicated on the delivery of the savings programme outlined in this report. Note that Equality Impact Assessments are attached as an appendix for relevant savings projects. Approve the implementation of recovery plan measures outlined in this report and note these are required as the HSCP budget is not yet in balance for 2023/24. 1. EXECUTIVE SUMMARY 1.1 The HSCP is entering 2023/24 in a healthy financial position. However, it has not been able to identify savings of the scale required to balance its budget. This is outlined in the Financial Plan and Budget. The budget is predicated on the delivery of a challenging saving programme being delivered during the year. Additionally, the HSCP will be required to minimise any request for additional financial support through the NHS brokerage mechanism. This document outlines additional value for money priorities. 1.2 The Value for Money Strategy supports the HSCP budget for 2023/24. It outlines: specific savings projects for approval by the IJB; longer term Value for Money priorities; and proposed recovery plan measures to minimise the requirement for brokerage support for NHS services;
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2 2. INTRODUCTION 2.1 2.2 This document sets out the savings plan and value for money priorities for financial year 2023/24. Its effective implementation is critical to the HSCP operating within budget. It is recognised that that the budget, along with the measures outlined in this report may not enable the HSCP to operate within the resources available to it in 2023/24. Service budgets will be reduced by the savings proposals outlined in this document, they will still exceed the resource available to the HSCP overall. This document focusses on outlining the measures required to manage the financial position through a series of specific savings and outlines additional Value for Money priorities. 3. DETAIL OF REPORT 3.1 Specific Savings Proposals 2023/24 3.1.1 The tables below provide a detailed listing of the savings proposals and budget adjustments incorporated in the budget for 2023/24. These indicate where an Equality Impact Assessment was identified as being required and these are attached as an appendix. Social Work – new savings 2023/24 for approval Social Work Savings 2023/24 £'000 EQIA Head of Service Description Allocate centrally held 22/23 growth budget to cost pressures 1,300 N/A Finance Removal of unallocated budgets. Allocate £500k of transformation budget to cost pressures 500 N/A Finance Reduce transformation budget from £900k to £400k. Remove vacant Programme Manager / SIO role & travel 85 N/A Finance Post has not been filled. Remove Contract & Demand Officer (non-recurring) 49 N/A Finance To be reconsidered if funding available, unable to fill at present. Increase income budget - occupancy and fee increase 268 N/A Finance Budget adjustments and fees and charges increases already approved. Vacancy Target uplift by inflation 200 N/A Finance Uplifts vacancy saving in proportion with pay inflation. Care at Home inflation, service efficiencies and smarter commissioning 400 YES (a) Health and Community Care Efficiency improvement and / or management of inflation uplifts. Saving within context of investment in Smarter Commissioning. Allocate remaining recurring unscheduled care funding to cost pressures 200 N/A Health and Community Care Budget adjustment, will be scope for non- recurring use of slippage. Re-evaluation of spend on all unpaid carer services and respite/short breaks 320 YES (b) Health and Community Care / AHP Assoc. Director Proposal is to remove budget which is currently unallocated / uncommitted, reduces capacity for further service development. LD Day Services Staffing 62 YES (c) Acute & Complex Care Proposal is to remove current vacant posts from staffing establishment. Review of sleepovers and improved use of TEC 80 YES (d) Acute & Complex Care Plan in place to deliver minor service changes. Additional Care Package reviews 100 YES (e) Acute & Complex Care Review of complex care packages - requires new approach due to difficulty in recruiting to post. Community Change Living Fund Cont. to Project Management 30 N/A Acute & Complex Care Use of existing reserves to support service improvement work.
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3 Reduce external placement budget by one (C&F) 160 N/A Children, Families & Justice Proposal aligns with policy direction. Income for unaccompanied asylum seeker children (C&F) 250 N/A Children, Families & Justice Positive impact for unaccompanied asylum seekers - Home Office funded. Interim care - remove spend to match reduced allocation 366 N/A Health and Community Care Interim care was a temporary SG measure and funding now ended. Sufficient non-recurring funds available to support existing placements, change is as a result of SG policy. Non recurring C&F - whole family wellbeing growth 120 N/A Children, Families & Justice Non-recurring slippage on new investment. End Guardian Service Contract for A&B Council Staff 25 N/A Chief Officer / People Partner End contract for LA staff from August 2023. Total 4,515 3.1.2 NHS Services – new savings for approval NHS Savings 2023/24 £'000 EQIA Head of Service Description National Insurance funding retained 888 N/A Finance Confirmed by SG in December 22 Budget Adjustments - prior year development budgets not required 200 N/A Finance Budget adjustment only Vacant Project Manager Role (SIO Team) 60 N/A Finance Post vacant Remove Depute Chief Officer role 105 N/A Chief Officer Post vacant Energy efficiency measures 80 N/A Finance / Estates Impact of BMS already installed Staff accommodation income 25 N/A Finance / Estates Increased availability and occupancy following investment in Lochgilphead Remove Analyst role from budget 54 N/A Strategy Fixed term post to end Review telecom lines and switchboard saving 32 N/A Strategy Project now progressing and savings target increased Public Health - grants 16 N/A Public Health Minor reductions in Public Health Grants Public Health - salary costs 20 N/A Public Health Budget adjustment to reflect current structure Public Health 6 N/A Public Health Misc Public Health budget adjustments Resuscitation Training Income 5 N/A Assoc. Nurse Director Additional income from delivery of training Reduction in training SLA with UWS 15 N/A Assoc. Nurse Director Reflects expected utilisation of UWS contract and misc. budget adjustments Mental Health Care Package Reviews - NHS 150 YES (e) Acute & Complex Care Reviews of complex care packages Prescribing 150 N/A Assoc. Director Pharmacy New target is in addition to expected carry forward from 22/23 Patient Services Income 50 N/A Health and Community Care Budget adjustment to reflect income receipts Childrens & Families Staffing and service re-modelling 250 N/A Children, Families & Justice Detail of proposed changes to be confirmed Non-recurring reduction in AHP investment 150 N/A Health and Community Care / Assoc. AHP Director Non-recurring saving on investment as new structure established Total 2,256 3.1.3 The above tables summarise £6,771k of specific savings proposals and budget adjustments which are proposed in 2023/24. Collectively these reduce budget flexibility, capacity for service improvement and investment. Work on the development of additional proposals will continue throughout the year.
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4 3.2 3.2.1 3.2.2 3.2.3 Value for Money Priorities There are several key pieces of work which require to be progressed during 2023/24 to help manage longer term sustainability. These are in addition to considering how a revised approach to budgeting could be implemented to move away from the current incremental approach. It is likely that service reductions will be required in addition to delivering efficiencies. Disinvestment from activity or services is far more challenging to manage and has impacts upon service users and partners. The process of linking cost to impact and outcomes is also challenging, particularly in remote and rural communities where costs often appear disproportionately high relative to activity volumes. NHS Formula Funding NHS funding is allocated national based on the National Resource Allocation Formula (NRAC). The formula is intended to provide a fair basis for assessing healthcare need in each Health Board area and takes account of population, age profiles, rurality and deprivation indicators in each area. The model is highly complex and operated by Public Health Scotland (PHS). NRAC provides an ‘internal’ proportion of the resources allocated to NHS Highland for the Argyll & Bute HSCP. The NHS Highland overall share of the national resource has been roughly static but the Argyll and Bute HSCP share of the NHS Highland allocation has reduced for 2 years in succession. Year NRAC Share of NHS Highland Incremental Impact Cumulative Annual Impact 2021/22 28.92% 2022/23 28.77% £1.0m £1.0m 2023/24 28.60% £1.0m £2.0m 2024/25 28.35%* £1.8m £3.8m * 2024/25 figure is provisional The table demonstrates the risk to the sustainability of health services within Argyll & Bute. It also indicates that there are demographic reasons why health need is considered, by PHS, to be reducing in the area. While the percentage reductions appear small, the cumulative impact is circa 1.5% of the NHS budget by 2024/25. The nature of delivering small scale services make it particularly challenging to keep delivering incremental savings that keep up with the funding reductions driven by this formula. It is proposed that the HSCP: Engage with PHS to better understand the drivers for the reduction; Develop a case for review of the local application of the formula; and Engage with NHS Highland, Argyll and Bute Council and local politicians. There are other issues associated with formula funding parity across Scotland and the impact of resources being held back to manage brokerage. Greater Glasgow & Clyde SLA The Greater Glasgow & Clyde SLA has not been reviewed for a number of years and is currently £66m or 25% of the NHS budget. The contract has been
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5 3.2.4 3.2.5 protected from Argyll & Bute savings and uplifted by nationally agreed inflation rates (overall lower than the increases in NHS delivery costs). Priorities are to: Improve engagement with Greater Glasgow & Clyde at a senior level; Analyse contract utilisation data and value for money; and Participate in review of SLA funding model. Agency, Locum & Supplementary Staffing Agency, Locum and Supplementary Staffing spend is a further concern. National benchmarks suggest that spend is relatively high and has increased. Managing this back down whilst maintaining critical services is challenging. However, the HSCP is not funded to continue to pay very high rates for staff and some action is required to manage this and ensure that all staff are treated fairly. This remains a national priority and steps to address it are outlined in the Workforce Strategy. Additionally the HSCP will set up management reviews of all agency spend as part of its financial recovery measures. Service Transformation The Transformation Programme will be reviewed to re-focus attention on opportunities to change services and deliver savings. It is likely that the SG will require a detailed plan describing significant service change to bring the HSCP back into financial balance. A new Transformational programme will be required to achieve this. 3.3 Financial Recovery Measures The tables above outline planned savings and priority value for money work. However, the HSPC expects to be operating at a deficit and is required to work towards managing within the resources available to it. This means additional measures are being put in place from the start of the financial year. These include: Staffing and Resourcing Group To review all vacancies prior to advert to consider opportunities for savings or delay. Review of delegations To ensure all spend above a reduced threshold, new high cost care packages, contract extensions or increases are approved by a Head of Service. Business case submissions To reflect removal of discretionary budgets and requirement for increased access to capital funding Reserves Utilise reserves and reconsider earmarking It is not intended that reviews of posts will result in increased front line service pressures or delay progress in reducing reliance on supplementary staffing. 3.3 Summary The elements of the Value for Money Strategy for 2023/24 are:
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6 Workstream Oversight & Reporting Social Work and NHS Savings Plan £6.8m SLT / Finance & Policy Committee NHS Formula Funding Chief Officer / Head of Finance GG&C SLA Chief Officer / Head of Strategy / Head of Finance Agency Locum & Supplementary Staffing Staffing & Resources Group Service Transformation Transformation Board Financial Recovery Measures SLT / Finance Teams / Finance & Policy Committee The value for money and savings agenda for 2023/24 is challenging and it is intended that this will contribute to minimising the in-year requirement for brokerage and contribute to the longer term financial sustainability challenge. 4. 4.1 5. RELEVANT DATA AND INDICATORS Information is derived from the financial systems of Argyll and Bute Council and NHS Highland. CONTRIBUTION TO STRATEGIC PRIORITIES 5.1 The Integration Joint Board has a responsibility to set a budget which is aligned to the Strategic Plan. It is also required to ensure that financial decisions are in line with Strategic Priorities and the delivery of high quality services. Implementing the savings programme will result in some increased risk to the ability of the HSCP to deliver on its strategic priorities. 6. GOVERNANCE IMPLICATIONS 6.1 Financial Impact – the savings plan has important governance implications and its successful implementation is a risk to the budget and the potential level of additional financial support required. 6.2 Staff Governance – None directly from this report but there is a strong link between HR management and elements of the savings plan. 6.3 Clinical Governance – None directly. 7. 7.1 8. PROFESSIONAL ADVISORY Professional Leads are fully engaged in financial planning and reporting. EQUALITY AND DIVERSITY IMPLICATIONS 8.1 Equality impact assessments are provided where savings projects could potentially have implications for people with protected characteristics. 9. 9.1 GENERAL DATA PROTECTION PRINCIPLES COMPLIANCE None directly from this report.
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7 10. RISK ASSESSMENT 10.1 The ability of the HSCP to implement the Value for Money Strategy effectively in 2023/24 is a risk. The budget report provides further detail on the financial risks associated with this report. 11. PUBLIC AND USER INVOLVEMENT AND ENGAGEMENT 11.1 The HSCP has sought to communicate and consult on its financial position within existing consultation processes including locality planning groups. Further targeted engagement will be required as some of the savings plans are implemented in the coming year. 12. CONCLUSIONS 12.1 The financial challenge facing the HSCP is severe in 2023/24. This report outlines a number of specific savings and value for money priorities which aim to manage the financial position within the framework outlined in the budget document. The IJB are requested to approve the measures outlined in this report alongside the approval of the budget for 2023/24. 13. DIRECTIONS Directions in respect of the budget will incorporate the savings programme. Directions required to Council, NHS Board or both. Directions to: tick No Directions required √ Argyll & Bute Council NHS Highland Health Board Argyll & Bute Council and NHS Highland Health Board APPENDICES: Appendix A-E – Equality Impact Assessments AUTHOR NAME: James Gow, Head of Finance and Transformation EMAIL: james.gow@argyll-bute.gov.uk