Feature / Introduction to…partnership funding

THERE HAS BEEN a real focus on a government decision to transfer millions of pounds counted as part of the NHS England growth funding to local authorities to spend on social care. But this is not the only way the NHS and councils share their funding.

Under section 256 of the NHS Act 2006, primary care trusts have wide-ranging powers to provide grants to local authorities and voluntary organisations, and most have such arrangements. The legislation allows payments to local authorities for spending they have incurred or will incur that: in the PCT’s opinion improves the health of any individuals; has an effect on, or is affected by, NHS functions; and is connected with any NHS functions.

Under the current scheme, which uses the section 256 powers, primary care trusts transfer a nonrecurrent amount designated by the Department to their local authority partner. This must be spent on social services that improve health, particularly in the areas of post-discharge services and reablement and winter pressures. In total PCTs received £150m in 2011/12 for reablement (£300m in 2012/13) and £648m to support social care (£622m in 2012/13).

There are different ways NHS organisations and local authorities can set up partnerships. One of the most common is where the bodies pool budgets and commission or manage an integrated service.

Every pooled budget must have a designated host partner, which manages the budget and handles the accounts and audit. As well as naming the designated host, a written agreement should set out: the functions covered; agreed aims; and the funds each will contribute.

The NHS can make grants to local authorities and vice versa. But NHS grants to councils must pay only for medical care and must not transfer healthcare functions.

When sharing funds, bodies must be aware of the practical considerations, because the NHS and local authorities operate under different statutory and regulatory regimes. Issues to be considered include governance; risk; and the financial framework for the partnership. Councils can recover VAT while the NHS may not, so the partnership may have to account for tax as if it were two bodies.

Also, since councils can charge for services, the partnership agreement should be devised so there is no loss of revenue.