London Transforming Care – FTA Funding Proposal DRAFT December 2017

DRAFT Introduction As outlined by the National team, TCPs were set up with the ambition to reduce reliance on inpatient care, and as such, they have trajectories to reduce the numbers of inpatients. National has outlined that, by reducing the number of inpatients in NHS England commissioned beds, this will enable the release of Specialised Commissioning (SC) funding to pay for packages of care in the community and the community infrastructure required to support discharges and prevent admissions. Building the Right Support (BRS) states that funding should flow with the patient and be managed on a TCP footprint. This should result in a ‘virtual’ pooled budget in operation for CCG, social care and specialised commissioning. Specialised Commissioning in London has undertaken work to put forward a proposed model to allow funds to flow to the TCPs via the CCGs using Funding Transfer Agreements (FTA). To give an indication of costs to be transferred, Spec Comm has estimated that the average cost of a bed for the London region is £180,000*. Therefore, if for example London were able to discharge 20 patients in a year, the amount that would be expected to be transferred from SC to the TCPs would be around £3.6m (full year effect). However, this just provides an indication of funding amounts – the intention is that money transferred would be the cost of savings from inpatient beds that are closed. This document has simplified the FTA process outlined in the paper that was previously shared and is more in line with feedback received by the TCPs. It is still a work in progress. *The National Team estimated that a bed costs in the range of £120,000-£180,000. London beds are typically the most expensive in the country and therefore we have estimated the London bed average cost to be at the upper limit of £180,000.

FTA Funding – Core Principles DRAFT FTA Funding – Core Principles The FTA funding mechanism is still a work in progress. The proposal is that Specialised Commissioning transfers funding to CCGs as follows: Dowry patients (inpatients of 5 yrs + at 1 April 2016) If a dowry patient is discharged, the amount saved from their Specialised Commissioning bed being closed would follow them to the community, in line with national guidelines. This amount would be transferred to the TCP via the lead CCG. The TCP would need to complete an FTA form for each dowry patient to access the funds. Net inpatient reduction (additional closed beds) Specialised Commissioning may be able to close additional beds in each TCP if there are more discharges of non-dowry patients than admissions, in line with the TC trajectory. At the end of a period of time (e.g. quarterly/annually, to be agreed), Specialised Commissioning will refer to the inpatient data to determine how many additional beds have been closed in each TCP in that time. Each TCP will be required to complete an FTA form documenting the patients they have discharged and admitted over that time period to confirm the number of beds that have closed (the difference between discharges and admissions). Specialised Commissioning will then transfer an amount equal to the total cost of the additional beds closed to the relevant TCP via the lead CCG. All funds transferred from Specialised Commissioning to TCPs must be ring fenced for Transforming Care only Specialised Commissioning will require TCPs to ring fence the funds received for Learning Disabilities patients only. TCPs will need to document how the Spec Com funding received has been used and its impact as part of an annual audit process.

Issues for discussion and resolution DRAFT Issues for discussion and resolution There are some FTA process issues that still need to be worked through. A summary of these is below for discussion and resolution: 1. Funds ring fenced for TC: The cost of community care is expected to be lower than the cost of a Spec Comm bed in most cases. As Spec Comm will transfer the full cost of the bed to the TCPs, the TCPs will receive an additional amount of money – the saving between the bed cost and the community care package. This saving must be ring fenced for Transforming Care purposes only. If any excess money from savings is not used for Transforming Care and TCPs are not able to demonstrate this in an annual audit report, those funds will need to be returned to Spec Comm. Alternative approach: Spec Comm transfers to the TCPs the cost of the community care package only and the saving from the bed cost is kept in a separate ‘pool’ that is accessed by the TCPs via business cases which a TCP or Regional panel will decide on. This approach was put forward in the original FTA paper. 2. Funds transferred to Local Authorities: TCPs will need to agree a joint funding mechanism for any funding to be transferred to the Local Authorities (Section 75 or Section 256 (BCF)).

Issues for discussion and resolution (continued) DRAFT Issues for discussion and resolution (continued) 3. 16/17 patients: FTA guidance sets out that “Patients who have already been discharged prior to 1st April 2017 and who were eligible for a dowry will not be considered as part of this FTA process but were part of a separate process as funds have already been released for a small cohort in 2016/17”. Therefore the FTA process will apply to 17/18 patients onwards only. Financial flows for 16/17 patients will not be made unless this was agreed before accounts to 31/03/17 were closed. 4. Scenarios that fall outside of the core principles: What happens to the funding if: Spec Comm cannot close a bed used by a dowry patient that has been discharged? Spec Comm needs to open new beds that have been previously closed? There has been a bed closure but there is a block contract and money cannot be transitioned to SC immediately? A patient is readmitted? These and other scenarios will need to be worked through.

DRAFT Next steps TCPs to provide any comments or feedback by email to Shepherd Ncube (shepherd.ncube@nhs.net) by 15 December. Spec Comm Finance team will then work through TCP feedback and agree the full details on how the FTA process will work in practice, addressing all of the issues that remain for resolution. This will include confirming the documents required for the FTA process: e.g. FTA form for dowry patient, FTA form for net inpatient reduction, Annual report template, and any guidance to complete the form Spec Comm will communicate the final process with full details to the TCPs in the New Year. Meanwhile, if there are dowry patients for 17/18 for which TCPs would like to receive funding, TCPs are able to complete FTA forms and submit these to Spec Comm.