With £57.8m of historic debt, Northumberland CCG was placed in special measures. CF was commissioned to help the system agree on a collective way forward for both securing short-term financial improvement and longer-term clinical strategy and transformation

 

  • Demonstrated how the system could improve assurance of delivery of savings
  • Identified areas for further savings, leading to a plan to return to financial balance within 3-5 years
  • Gained regulatory support with the direction of travel

Issue

Delivering health and social care services to a population of 320,000, Northumberland is a high performing system, which is provided for by three main organisations: Northumbria Healthcare NHS FT (NHCT), Northumberland Tyne and Wear NHS FT (NTW), and North East Ambulance Service NHS FT (NEAS). All three of these providers are rated ‘Outstanding’ by the CQC, and performance against targets such as cancer referrals, referral time to treatment, and waits in A&E are amongst the best in the country. The providers also show strong financial performance, in particular NHCT, which reported a surplus of £27.8m in 2017/18. Conversely, Northumberland CCG started with an underlying deficit, and over time this has deteriorated, generating a £57.8m historic debt by the start of 2018/19, resulting in them being placed in special measures.

Whilst financial performance is improving, with a deficit of £17.8m in 2017/18 and a planned £8m deficit (before CSF funding) in 2018/19, there were no plans in place to reach breakeven or repay the historic debt. The system has also struggled to secure the necessary regulator support to progress their plans to integrate care under an ACO and faced competing pressures to achieve system run rate balance within the allocation.

Solution

We provided a review of the affordability, ambition, alignment and deliverability of financial plans, an assessment of the system capacity and capability to deliver change and provided recommendations for how the system might address any gaps in capacity, capability and improve financial performance.

Methodology

We worked closely with local finance leads to gain an understanding of the historical financial performance of the system and the robustness of the 18/19 financial plans, looking through three lenses

  1. affordability and alignment
  2. ambition
  3. ability to deliver

Our approach was based on deep experience on both provider/ commissioner finances and regulator assessment of finances. We scrutinised the assumptions in the operating plans of all organisations submitted to NHS England and NHS Improvement, assessed the associated risk and compared the alignment between the commissioner and provider plans. This enabled us to build up a system bridge outlining the expected financial position of the system.

Results

The outcomes of the work were in bringing system leaders together to agree a collective way forward for both securing short-term financial improvement and longer-term clinical strategy and transformation, including:

  • Demonstrating to the system how they could improve assurance of delivery of savings through enhanced PMO and closer system working to de-risk operational plans
  • The identification of areas for further savings, leading to a mapped out journey to return to financial balance within 3-5 years, including the resolution of £57.8m of historic debt Facilitation of the system to gain regulatory support with the direction of travel
  • Supporting the system to align around three key strategic priorities and create a clear plan to move forward with a new way of working through:
    • Developing a system financial regime which supports the clinical strategy and aligns incentives across organisations
    • Aligning the system around a shared vision, compelling case for change and clinical strategy that outlines care models for priority segments of the population
    • Developing strong system leadership supported by the appropriate governance and accountability to ensure delivery

Testimonial