An Overview of the Funding Position for Health and Social Care in Leeds following the allocation of funding in December 2014

1. Health and Wellbeing Policy Briefings for Leeds
Funding Position for Health
and Social Care in Leeds:
January 2015

2. Timeline of events to explain the funding position
22/11/2014
Funding Allocations to Local Government
3/12/2014
19/12/2014
18/12/2014
2015-2020
20??
The Autumn Statement
NHS Five Year Forward View
Funding Allocations to the NHS
The Funding Outlook
Future funding ways of funding
“The NHS needs more money.”
£2bn of additional funding for NHS
How the cuts fall on local councils
How the additional £ is shared out
So what is the financial position for
health and social care in Leeds?
How future funding may be structured

3. NHS 5 Year Forward View
Scenario Annual
Productivity
Gains
NHS Spending Change by 2020/21 Estimated Annual Funding
Gap by 2020/21
1. 0.8% Flat, real terms increase based on GDP
growth
£21 billion
2. 1.5% Flat, real terms increase based on GDP
growth
£16 billion
3. 2%-3% Flat increase based on population growth Nil
• The NHS faces a funding gap of nearly £30bn a
year by 2020/21
• The NHS need to achieve significant efficiency
gains
• But more money is needed from government
(please)- £8bn extra per year by 2020

4. The Autumn Statement
• Following the requests in the NHS Five Year Forward View, £2bn
additional funding committed by central government
• Of which £1.7bn is additional annual revenue funding
• Funding sourced from bank fines, Treasury and underspends

5. Funding Allocations to the NHS
Where does the money go? Growth for Commissioning Streams
Source: NHSE Board Papers 17/12/2014
Department of
Health
Local
Government
Public Health
Public Health
England
NHS England
Other Primary
Care Services
CCGs
Specialised
Commissioning
£69,212m £14,634m
£13,366m
£100,604m
• £1.5 billion of additional funding to
frontline health services including
primary care, local clinical
commissioning groups (CCG), and
specialised services
• £480 million of additional funding
used to support transformation in
primary care, mental health and
local health economies.
• Spending on GP and primary care
services will for the first time in a
number of years grow in real terms
at a higher rate than for other local
health services, in recognition of
the pressures in primary care
£2,790m

6. Funding Allocations to the NHS
CCG Allocations
• In 2013 NHS England went through a long process of calculating how funding to
CCGs should be shared out across the country. CCGs were judged to have a ‘target’
funding amount, based on a complex formula of using demographics and
deprivation weightings
West
£918,000
North
£563,000
South & East
£819,000
Leeds - £2.3m,
1.94% growth
• The additional funding for 2015/16 has been
distributed to give CCGs who are judged ‘under-
target’ a higher proportion of the additional funding.
• In Leeds all 3 CCGs are judged as ‘above target’, which
means that they have received the minimum growth
in allocations at 1.94%, totalling £2.3m across the city.
• Some of this funding will need to be used to increase funding
for local mental health services, winter resilience funding and to account for the
recent changes made to how the tariff works for paying for non-elective admissions

7. Funding Allocations to Local Government
National Picture
Local Government Income against Expenditure 2010/11 to 2019/20
Source: LGA, Future funding outlook 2014
• Local government received confirmation of the financial settlement for 2015/16
• Government figures stated a reduction of spending power for local councils of 1.6%.
However, this figure includes the Better Care Fund allocations and other grants, which can be
accounted for elsewhere
• By next May, government funding for councils will be 40 per cent lower than it was in 2010
• The LGA estimates that funding gap for adult social care to 2020 is £4.3 billion

8. Funding Allocations to Local Government
Local Picture
• In 2015/16 Leeds City Council will have £46m less central funding
• This is on top of the £129m that the Council has already lost over the last four years
• There are also funding pressures from inflation, increased demand for our services and
shortfalls in grant funding
• As a result Leeds City Council needs to save £76.1m to balance the budget
• Leeds City Council has launched a budget consultation with a link here and a explanatory
video on the link below.

9. So where does this leave us?
The funding outlook
• Work by the NHS Commissioning Support Unit and Ernst & Young during 2014 identified the financial
challenge in Leeds to be £633m by 2020.
• This is an indicative calculation based on modelling and estimations, but does reflect the scale of the
challenge.
Organisation 5 year forecasted
shortfall
(£’m)
Leeds Teaching Hospital Trust (277.3)
Leeds & York Partnership Foundation Trust (36.4)
Leeds Community Healthcare (31.6)
Yorkshire Ambulance Service (6.1)
Leeds North CCG (24.4)
Leeds South and East CCG (36.9)
Leeds West CCG (30.6)
Leeds City Council (114.9)
NHS England (74.7)
Total Challenge (633.0)
Source: Leeds City Council Executive Board Report, 19/11/2014
• The size of the collective challenge is one of the reasons why a whole system approach is being
taken to build a sustainable health and care system.

10. And what about future funding
announcements?
May 2015
Summer
2015
2018/19
2016/17
and beyond
Post-election spending review?
General Election
Multi-year settlements?
Place-based settlements?
Health and Social Care funding will be a major focus point of
the election campaigning
A spending review for funding to government departments,
including health and social care, beyond 2015/16, will take
place soon after the election
NHS England wants to move towards allocations for clinical
commissioning groups and primary care, and potentially the
Department’s funding to local authorities for public health,
are combined
NHS England are working towards allocating resources over a
number of years, instead of annual allocations to CCGs

11. Links and Sources of Useful
Information
• NHS 5 Year Forward View: http://www.england.nhs.uk/wp-content/uploads/2014/10/5yfv-
web.pdf
• Autumn Statement 2014: https://www.gov.uk/government/publications/autumn-statement-
documents
• NHSE Allocations to CCGs: http://www.england.nhs.uk/2014/12/19/2015-16-allocations/
• Local Government Financial Settlement:
https://www.gov.uk/government/speeches/provisional-local-government-finance-settlement-
2015-to-2016
• Leeds City Council Budget Consultation: http://www.leeds.gov.uk/council/Pages/our-financial-
plans.aspx
• The Barker Commission, ‘A New Settlement for Health and Social Care’:
http://www.kingsfund.org.uk/publications/new-settlement-health-and-social-care
• LGA & ADASS, ‘Adult social care funding: 2014 state of the nation report’
http://www.local.gov.uk/documents/10180/5854661/Adult+social+care+funding+2014+state+o
f+the+nation+report/e32866fa-d512-4e77-9961-8861d2d93238
• Public Accounts Committee ‘Funding healthcare: making allocations to local areas report’
http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-
accounts-committee/news/report-funding-healthcare/