News / News review - Seamus Ward assesses the past month in healthcare finance

Implementation of the government’s reforms gained momentum in May, with greater clarity on the future shape of clinical commissioning groups (CCGs) and commissioning support services (CSSs) and publication of CCG running cost allowances (see p4). But the importance and scale of the change programme was spelled out in the Department of Health roadmap for 2012/13. The document says much of the Department’s work will focus on developing commissioners, the NHS Trust Development Authority and other new organisations, such as Healthwatch England and Health Education England. But it adds, intriguingly, that a new pay strategy will be published in August/September. ?

The transfer of staff to the new organisations will be perhaps the biggest tranche of work. The Department opened a consultation on the transfer of staff to the NHS Commissioning Board (NCB). In a letter Richard Douglas (left), the Department’s director general of policy, strategy and finance, asked for views on whether the appropriate staff groups to be transferred have been identified and the potential implications for staff affected by the transfer.

The National Quality Board reiterated that the discipline and rigour that occurs in financial handovers in the NHS should be applied to quality as the service implements the government’s reforms. In a guide, How to maintain quality during the transition: preparing for handover, the board set out three guiding principles for maintaining quality: documents should be in the public domain, sending organisations must be honest about risks and governance systems must be in place to ensure full and frank disclosure.

Cost pressures run throughout the system – even at the NCB. The board received an additional £35m from the Department of Health and reallocated its internal budgets after it identified further running cost pressures during May. In February, the NCB outlined its £492m running costs, but a number of changes have led to the need for more staff and other cost pressures totalling more than £111m. This includes an additional £30m to cover ring-fenced depreciation, £35m for family health services and £7m to support the NCB informatics strategy, including hiring informatics finance specialists. The NCB has cut its non-pay expenditure by £25.5m (once the depreciation has been factored in) and reduced its contingency reserve from £60m to £30m. The briefing also notes that a further £108m will be available in 2013/14, increasing the budget to £635m.

Staying with the NCB, it will take responsibility for commissioning child health information systems (CHIS), which will be funded by the public health budget. CHIS are patient administration systems that are currently operated and commissioned by primary care trusts.?Guidance on information requirements for the systems said the decision would be reviewed in 2015, when local authorities are due to take over a number of child health services.

In Westminster, there was controversy as health secretary Andrew Lansley (below) blocked the publication of the transition risk register, which set out the potential risks of the government’s reforms of the NHS in England. An information tribunal had ruled that the register, created by civil servants in November 2010, should be published under the Freedom of Information Act, but Mr Lansley exercised his right to veto this. However, the Department published a document outlining the risks identified in 2010 and the mitigating actions taken. Mr Lansley, who was again given a lukewarm welcome at the Royal College of Nursing annual congress, said such registers were essential to the formation of policy and should be a ‘safe place’ for civil servants to speak frankly about the risks associated with new policies. ?

The Queen’s Speech included a number of measures relevant to the NHS. These included a draft measure to reform adult care and support in England, change pension rules and abolish the Audit Commission. The care and support bill will aim to give people greater choice and control over the services they receive, while the pensions bill will bring forward the increase in the state pension age to 67 between 2026 and 2028 (rather than between 2034 and 2036). The local audit bill – to be published as a draft in the summer – would close the commission and allow public bodies to appoint their own independent auditors. ?

The cost of gluten-free food such as bread and biscuits for people with coeliac disease caused a stir. The BBC found that the NHS spent £27m on gluten-free prescriptions in 2011, but handling and delivery charges – which were not included in the figure – could quadruple the cost.

Fraud also hit the headlines. Dental fraud, including claims for non-existent patients, may have cost the NHS more than £70m in 2010/11, the Department said. The government plans to introduce a new dental contract that will allow analysis of claims to spot potential frauds.

In separate work, the National Fraud Initiative identified 611 NHS employees who were linked to cases of housing benefit fraud, error or overpayments in 2010/11. This is almost double the number in the previous report on the data matching exercise, which covered 2008/09. All NHS bodies, except foundation trusts, were included in the exercise. Overall, the Audit Commission found £275m in fraud, overpayments and errors across the UK public sector. ?

Finally, local health boards in Wales met their financial targets in 2011/12, making a small surplus of £500,000. Health minister Lesley Griffiths thanked managers, saying this was a ‘remarkable achievement’ that had been delivered alongside improvement and maintenance of clinical performance. NHS organisations also delivered savings of £290m in year. Last October the Welsh government gave the NHS an additional £145m and has allowed three of the seven health boards to bring forward some of their 2012/13 funding to meet their targets. This amounted to  £12.4m in the three organisations, she added. ?