Financial management is key to ICS’ success

By Dr Eleanor Roy | 24 June 2022

The starting line for integrated care systems is rapidly approaching. In its new briefing paper, CIPFA considers the remaining challenges at place level – some of which are fundamental to public financial management.

The start date for integrated care systems (ICSs) to become statutory bodies is 1 July.

Much of the focus to date has been on NHS structures, but challenges remain at the ‘place’ level, as reflected in the government’s integration White Paper earlier this year. These include outcomes, accountability and finance, which are all key components of public financial management. They are also critical elements of effective collaboration across the different systems and cultures of the NHS and local government. CIPFA’s recent briefing paper, Integrating Care: putting the principles in place, builds on a roundtable discussion between senior leaders from the NHS and local government to explore these remaining challenges in more depth.

Among the issues discussed was the wider picture across the health and care sector. The policy landscape for health and care is particularly crowded with many competing priorities. Combined with the ‘here and now’ pressures on both the NHS and councils, it will be difficult to find bandwidth for integration – never mind moving ‘further and faster’ as envisaged by the White Paper.

Many questions remain around what integration is actually trying to achieve. The core aims for ICSs and the definition of success in the White Paper fall far short of providing clear, specific and measurable outcomes to work towards.

The date of 1 July for ICSs to become statutory bodies will be no big bang starting event. There is widespread variation in ICSs and their places – not only in terms of their nature and characteristics, but also what stage of the integration journey they are already at.

Good public financial management requires a focus on the full extent of responsibilities in the long-term, to ensure outcomes and value for the public pound are achieved. This requires:

  • Coherence of policy/priorities and clarity on what the intended outcomes are
  • Certainty of funding in the medium to long-term to enable financial planning
  • The ability to make evidence-based decisions on allocation of public resource
  • Evaluation of progress to inform future decisions and ensure value for money

This is true of any organisation, but when taking a whole-systems approach it’s essential for all partners to know what they can bring to the table to contribute to achieving the intended goals. A whole-systems approach recognises the interconnectedness of organisations both nationally and locally, and that outcomes can be more effectively achieved when these organisations work together towards a common goal.

An aligned national outcomes framework (involving collaboration on the part of various government departments) could bring together the competing priorities outlined above. This could provide a single set of shared goals for the health and care sector – without adding a further level of bureaucracy. It would need to be adaptable to local circumstances, rather than national prescription driving local activity. Local systems and places could then determine their appropriate priorities and metrics, based on evidence, and progress could be measured against these.

The proposal to set criteria for accountability arrangements and have a single accountable person at place level does not appear to fit with the high level of variation across places. Also, it doesn’t take into account the delegation of functions to place level that will naturally develop and evolve over time. A principles-based framework that sets minimum expectations for different stages of the evolution of place seems more appropriate. It would then be for each place to determine their own arrangements, and for others to assure themselves that these are sufficient.

While there has been much focus on the NHS ‘system finance’ aspect of ICSs, there’s been less consideration of how the different financial regimes of the NHS and local government interact. A shared understanding is essential if truly integrated services are to become a reality.

Delegating appropriate functions and resources to place level can considerably increase the chance of improving outcomes for the local population – increasing value for money. While the commitment to review arrangements for pooling budgets is welcome, this is merely one tool in the box. A more overarching view of aligning resources would be helpful.

Delegation of resources to place level could be underpinned by a joint financial framework. This would ensure that funding reflects the places where decisions are made, and support the delivery of shared outcomes. The principles underpinning this could be set out alongside those for accountability arrangements, to provide a single principles-based framework allowing local flexibility to develop and become more sophisticated as places evolve.

Over the summer, CIPFA will be developing this thinking further. We’ll be expanding on these issues and drawing on good practice to identify solutions. Our ‘Integrating Care’ policy hub seeks to bring together key partners from across the sector to inform our work in this area.

For more information on this paper, as well as the ‘Integrating Care’ hub, visit CIPFA’s  Integrating Care webpage.

Dr Eleanor Roy is CIPFA health and social care policy manager


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