1. Everyone Counts 2014/15 Planning Guidance Nicola Bailey Chief Operating Officer Michael Houghton Director of Commissioning and Development

2. Planning Framework

3.  1 vision: high quality health care for all, now and for future generations  5 outcome domains  7 outcome measures  3 key measures  6 characteristics of high quality, sustainable health and care systems  4 essential elements

4. One vision  High quality health care for all now and for future generations: −driven by quality in all we do −equal access for all, especially the vulnerable and the excluded −spread existing excellence −sustainable, high quality for the long term

5. 5 Outcome Domains, 7 Measures (ambitions)  Preventing premature death  Quality of life for LTCs  Quick recovery from ill health  Great experience of care  Safe care  Securing additional years of life for people with treatable mental and physical conditions  Improving health related quality of life for people with long term conditions  Reducing avoidable time in hospital  Increasing elderly people living independently at home on discharge  Increasing positive experience of hospital care  Increasing positive experience of care outside hospital  Significant progress on eliminating avoidable deaths

6. 3 Key Measures  Promoting health, preventing ill health in partnership  Better care for the most vulnerable fffff  For mental and physical health 1. Improving health ffffffffff 2. Reducing health inequalities 3. Parity of esteem

7. 6 System Characteristics The 6 characteristics of high quality, sustainable health and care systems in 5 years time are:  Citizen inclusion and empowerment  Wider primary care, provided at scale  A modern model of integrated care  Access to the highest quality urgent and emergency care  A step-change in the productivity of elective care  Specialised services concentrated in centres of excellence

8. Unit of Planning – County Durham Unit of Planning ND CCG DDES CCG DCC CDDFT TEWV DDTAT

9. Clinical Programme Board Five year strategic plan Unplanned carePlanned careIntermediate careFrail elderly7 day servicesSeQiHS

10. Planning Fundamentals  Strategic and operational plans must explicitly set out the approach to:  Improvements in the 5 outcome domains and 7 measures  Delivering the 3 key measures  Implementing the 6 system characteristics  Delivering the 4 essential elements  Plans should be:  Bold and ambitious  Developed in partnership with providers and local  authorities  Locally led  Operational and better care fund plans must be driven by the strategic plan

11. Strategic, Operational and Financial Planning  Strategic plan  System vision  Sustainability  Key values and principles  Integration  Improvement interventions  Quality improvement  Governance overview  Operational plan  Outcomes  Activity  NHS Constitution  Better Care Fund

12. Strategic, Operational and Financial Planning  Financial plan  Financial plan summary  Financial plan detail 2014/15 – 2018/19  Investment  Capital  Revenue resource limit  QIPP 2014/15 – 2018/19  Statement of financial position  Contract value 2014/15 – 2018/19  Planning assumption  Risk  Cash

13. Strategic enablers  NHS standard contract  The quality premium  Commissioning for quality and innovation  Non recurrent funds

14.  £200m for Local Authorities (LAs) in 2014/15 (Section 256 of the NHS Act 2006)  £3.8bn pooled budget in 2015/16 (Section 75 of the NHS Act 2006) for health and social care services to work more closely together in local areas, based on a plan agreed between the NHS and LAs  £1bn of £3.8bn ‘payment by performance’ in 2015/16  Signed off by Health and Wellbeing Boards (HWBs) Links to earlier letters: Joint LGA/NHS England narrative (Aug 2013)Joint LGA/NHS England narrative (Aug 2013) Joint letter & draft template (Oct 2013)Joint letter & draft template (Oct 2013) Better Care Fund Plans must deliver on national conditions:  Protecting social care services;  7-day services to support discharge;  Data sharing and the use of the NHS number;  Joint assessments and accountable lead professional  Delayed transfers of care  Emergency admissions  Effectiveness of reablement  Admissions to residential and nursing care  Patient and service-user experience  Local metric Pay for performance based on:

15. Planning Timetable

16. Plan Assurance Process  Address the planning fundamentals  Build on the existing CCG and DC assurance frameworks  Triangulate between:  commissioner and provider plans  outcomes, activity and finance  plans and planning assumptions  plans, local engagement and relationships  Operational, BCF and strategic plans  Joint process including regional team, area teams, Monitor, NHS Trust Development Authority

17. Durham, Darlington and Tees planning guidance and allocation of resources 2014-15 and 2015-16

18. Total NHS England resources 2014-15 and 2015-16 2013/142014/152015/16 £bn NHS England recurrent allocation93.6296.6498.84 Growth3.1%2.3% Estimated GDP deflator2.1%1.5% ‘Real term' growth1.0%0.8% Other non recurrent allocations; Surplus drawdown0.650.40 Surplus carry forward0.530.470.07 Winter pressures0.25 AME/Technical0.66 2.091.781.13 Total allocations95.7198.4299.97

19. Total NHS England resources 2014-15 and 2015-16 2013-142014-152015-16GrowthEfficiency £bn 2014-152015-162014-152015-16 Growth3.1%2.3% Estimated GDP deflator2.1%1.5% ‘Real terms' growth1.1%0.8% CCG Programme62.7564.3465.692.5%2.1%3.3%5.9% Better Care Fund0.861.10 28.1% CCG Admin costs1.35 1.220.0%-9.6%2.1%11.3% Quality Premium0.000.20 Total CCG64.9666.9968.213.1%1.8% Specialised12.9613.5214.334.3%6.0%6.2%3.1% Primary Care (AT)11.7612.0212.222.2%1.7%2.5%2.2% Primary Care (GPIT and other)0.190.28 47.4%0.0% Other direct commissioning0.430.440.452.3% 1.6%1.8% Public Health S7a1.711.80 5.3%0.0% NHS England Programme0.980.930.96-5.1%3.2%18.5%2.6% NHS England Admin0.670.540.49-19.4%-9.3%2.6%11.3% Other0.12 0.0% NHS England28.8229.6530.652.9%3.4% Total93.7896.6498.863.1%2.3%

20. NHS England Allocations  Two year funding allocations 2014/15 and 2015/16 published, NHS England uplift agreed at 3.1% for 2014/15 and 2.3% for 2015/16  The Department of Health Mandate requires NHS England to run a transparent allocation process to ensure locality funding is based on the principle of equal access for equal need, having regard to need to reduce inequalities in access to and outcomes from healthcare  Revised fair share formula for CCG and primary care allocations with an agreed pace of change - CCG target allocations published 20 December 2013  CCG sector receive real terms growth plus £250m in 2014/15 and £400m in 2015/16 to support cost pressures and pace of change  Average uplift for CCG programme: 2014/15 = 2.54% and in 2015/16 = 2.1%  Running costs quantum maintained in 2014/15 and reduced by 10% from 2015/16

21. Fair Share Allocations  Population, age and deprivation are the key factors defining the ‘need’ for health care.  As has previously been reported, in December 2012 NHS England launched a fundamental review of the allocation policy through the Advisory Committee for Resource Allocation (ACRA).  Initial findings were published by NHS England in August 2013, with a proposed new formula which placed a greater emphasis on age. Historically, deprivation factors were addressed through a Disability Free Life Expectancy (DFLE) adjustment representing unmet health need relating to deprivation. This adjustment was removed in the summer exercise due to limited evidence on the cost impact of unmet need (DFLE failed to capture pockets of deprivation in otherwise affluent areas).

22. Fair Share Allocations (continued)  NHS England has since however revisited the formula and in December 2013 agreed to a further adjustment for inequalities – using the standardised mortality ratio (SMR) < 75 to reflect unmet need. SMR is considered the best available option as it is strongly correlated to deprivation, is available for small areas (7,000 pop) and is updated frequently. Using this measure allows deprived communities within otherwise affluent areas to be recognised.  This results in an additional adjustment to the formula to target additional resource to areas with poorer outcomes, enabling additional investment towards closing the gap. This adjustment is set at 10% for CCG allocations 15% for primary care (assuming that unmet need can be more effectively addressed through primary and community care).  Although North Durham CCG remains above its ‘target’ allocation based on this new allocation formula, a pace of change policy has been applied with all CCGs receiving a minimum uplift in 2014/15 of 2.14% and 1.70% in 2015/16.

23. CCG Allocations Allocation GrowthAllocationGrowth Social Care fund Total Allocation Better Care FundBCF % of 13-1414-15 15-16 Allocation £’000 % % % NHS Darlington CCG130,681133,4782.14%135,7471.70%2,297138,0447,1755.3% NHS DDES CCG397,057405,5542.14%412,4481.70%7,147419,59521,9675.3% NHS North Durham CCG306,409312,9662.14%318,2861.70%5,789324,07517,2265.4% NHS HAST CCG357,996365,6572.14%371,8741.70%6,171378,04519,5335.3% NHS South Tees CCG376,939385,0052.14%391,5501.70%6,775398,32520,8445.3% Durham, Darlington & Tees1,569,0821,602,6602.14%1,629,9051.70%28,1791,658,08486,7455.3% North19,379,21219,808,4332.21%20,161,4851.78%341,88620,503,3711,066,3255.3% Midlands & East18,252,72618,724,5072.58%19,122,1122.12%327,63819,449,7501,014,7275.3% London9,721,46710,019,8643.07%10,282,6512.62%170,36410,453,015539,8375.2% South15,390,30715,783,6232.56%16,113,8982.09%260,11216,374,010839,1115.2% Total62,743,71264,336,4272.54%65,680,1462.09%1,100,00066,780,1463,460,0005.3% Lowest2.14%1.70% Highest4.92%4.49%

24. North Durham CCG Programme Budgets:2013/142014/152015/16 CCG Allocation (£’000)306,409312,966318,286 Growth2.14%1.70% Social Care Fund (from NHS England central funds)5,789 Total Allocation306,409312,966324,075 Total transfer to Better Care Fund17,226 Running Cost Budgets: Running Cost Allowance (£’000)6,070 5,463 Reduction10% (£607k) Note – programme budget allocation will change once specialised commissioning and other allocation adjustments confirmed

25. ‘Pace of Change’ Current Position: Programme Budget Baseline Allocation Registered Population Allocation per head £’000£ 306,409249,0841,230 Forecast Position: Opening Target allocation per head Distance from target Growth on prior year Allocation per head Estimated registered population CCG Programme Budget allocation Total growth on prior year Closing target allocation per head Distance from target 2014/151,1923.20%1.51%1,249250,627312,9662.14%1,2222.16% 2015/161,2123.04%1.08%1,262252,174318,2861.70%1,2372.02%  Pace of change agreed by NHS England – all CCGs to receive minimum 2.14% uplift in 2014/15 and 1.7% in 2015/16  CCGs have target allocations per head and expectation is for ‘distance from target’ to reduce over time:

26. Better Care Fund (BCF)  Previously known as integration transformation fund (ITF)  Total £3.8bn pooled budget in 2015/16, includes reablement and carers’ breaks funding from CCGs along with approx. 3% from CCG baseline resources  Requires joint plans to be developed and agreed by Health and Wellbeing Boards Better Care Fund 2015/16 Social Care fund Carers and Reablement CCG Baseline resources Total Better Care Fund £'000 DDES CCG7,1472,70012,12021,967 North Durham CCG5,7892,0849,35317,226 Total County Durham BCF12,9364,78421,47339,193 Capital (including share of £220m for Disabled Facilities Grant)4,542 Total resources43,735

27. Running Costs  2014/15 - no additional funding for inflation i.e. quantum remains the same but growing population means £/head will reduce  2015/16 - 10% reduction  2013/14 = £25 per head  2014/15 = £24.78 per head (population growth)  2015/16 = £22.11 per head  Thereafter same methodology applied.  £400m pensions pressure anticipated in 2015/16 plus changes to NI rates  Concern over consistency with legal framework and ability to deliver transformational strategy  From 2014/15 no external funding for transition costs i.e. all restructuring costs must be funded from within running costs.

28. Planning Assumptions / ‘Business Rules’ CCG Planning Assumptions Business rules 2014/152015/16 Minimum 0.5% contingency 1% surplus 2.5% non-recurrent spend (including 1% for transformation) Minimum 0.5% contingency 1% surplus 1% non-recurrent spend Tariff AssumptionsUpliftEfficiencyNet efficiency Non-acute services (community and MH)2.2%-4.0%-1.8% Acute services (non-tariff)2.5%-4.0%-1.5% Acute services (national tariff)2.8%-4.0%-1.2%