Technical / CIPFA-HFMA survey sheds light on BCF early experience

The better care fund (BCF) remains a key part of government plans to drive closer working between health and social care services, writes Debbie Paterson.

November’s spending review underlined this, as it promised to expand the pooled funds that provide the foundation for the programme.

While the NHS mandated contribution will be maintained, councils will be given an additional £1.5bn by 2019/20 to channel into the fund.

They will also have the ability to raise up to an estimated additional £2bn through a new social care precept (adding 2% to council tax income).

So there are clearly big plans for the fund’s future. All of which should increase interest in how local areas are getting to grips with the new policy and approach. New work by the HFMA and accountancy body CIPFA aims to shed light on this – at least in terms of financial aspects.

Their survey of clinical commissioning groups and local authorities looks at experience to date.

As expected, getting the better care fund off the ground has not been straightforward, but some positive messages are emerging as well as lessons that could usefully be learned across the country.

Of some concern is the level of engagement in the accounting guidance for the BCF. This was included in the Department of Health’s Manual for accounts published back in August 2015. While just over 60% of respondents were aware that the guidance had been published, less than half had actually read it and fewer still had passed it on to their partners in the fund.

Accounting for the better care fund is high on auditors’ and the Department’s lists of risks for this year. It is something that cannot be done in isolation, requiring the agreement of all parties to each BCF arrangement.

Accounting for the better care fund is not necessarily straightforward and there is no ‘one size fits all’ solution. The accounting will depend on the arrangements in place and, in particular, which parties or party to the fund has control over it. Work to date indicates that each BCF arrangement is likely to be unique in some way.

To establish where the control lies, it is important to understand which entities can make which decisions. This will involve a review of the underpinning section 75 along with any related contracts.

It will also include an assessment of the commissioning arrangements in place, particularly whether commissioning is being done on a lead or joint basis.

The Department’s guidance makes it clear that the BCF (or any pooled budget) is not an entity in its own right, so there cannot be any balances at the year-end between the fund and the partners to it. Alongside this, it is important to understand that the accounting should follow payments made for services and not funding transfers. This is especially important to understand in the context of agreement of balances as payments for services between NHS bodies will fall into that exercise.

This is not simply a CCG issue, although contributions to the BCF are likely to be material for most CCGs. While NHS provider bodies may not be formal fund members, they will be entering into transactions with it.

They need to understand how these transactions are accounted for. For example, it may be that services are being paid for by the host of the fund while the transaction is actually with another fund member.

The FT Annual reporting manual, published at the end of November, refers foundation trusts to the Department’s guidance and stresses the importance of understanding whether bodies are acting as principal or agent in any particular scenario.

Debbie Paterson is a technical editor for the HFMA