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What are our overall aims by 2028?

To deliver a balanced system financial position as an ICB and ICS so that both organisationally and as a system we deliver our collective duties, meaning that:

  • Local revenue resource use does not exceed a limit set by NHS England – in support of this prior to each new financial year we will agree and publish a System Financial Plan; and
  • Local capital resource use does not exceed a limit set by NHS England – in support of this prior to each new financial year we will agree and publish a System Capital Plan.

To deliver a sustainable System Financial Plan that sees the system recurrently delivering against allocations and using non recurrent means to enhance delivery and mitigate risks, rather than to support the in-year financial plan.

To develop a culture that will focus on overall system deliverables, not just those of individual organisations to support delivery of a sustainable System Financial Plan. This will see the system recurrently delivering against allocations and using non recurrent means to enhance delivery and mitigate risks, rather than to support the in-year financial plan.

To enhance productivity and ensure value for money for the Coventry and Warwickshire pound across health and social care.

To contribute to the other core aims of the ICS in improving outcomes, tackling health inequalities and supporting broader social and economic development within Coventry and Warwickshire.

To ensure that capital planning enables system transformation and provides a pipeline of bids to meet system investment requirements, particularly around digital and estate.


What’s our starting point?

The Coventry and Warwickshire Finance Advisory Board (FAB) was established pre-Covid based on a joint purpose across Providers and Commissioners within the system to improve the overall system financial position in the face of difficult financial pressures. Refocusing FAB for the ICS means a greater focus on strategic aims and therefore a splitting of the FAB into Strategic, Tactical and Operational Groups.

The Strategic Finance Group (SFG) brings together Finance Directors from across the ICS to provide financial expertise and assurance to support the ICS Executive Group in developing, understanding and implementing robust, viable and deliverable financial plans which meet the health and care needs of the people of Coventry and Warwickshire and best utilise the system resources. The SFG also directs the workflow of the Tactical and Operational Groups of FAB, receives and approves recommendations arising from these groups, and acts an escalation point for key risks and issues arising from financial reporting and the operation of cost controls. SFG reports formally into the Finance and Performance Committee of the Integrated Care Board and is thus part of the overall financial governance for the ICB and ICS.

The SFG is chaired by the ICB Chief Finance Officer with focus on the areas outlined in this plan. The starting context for the plan is again one of difficult financial pressures:

  • The final submission of the 2023/24 Revenue Financial Plans shows a system break even position, which enables delivery in line with those national recovery objectives for the year. The SFG has undertaken continued review of the financial position between draft and final submissions, with continued confirm and challenge meetings, as well as a review on efficiency as outlined below and has reduced the deficit from the original draft plan position of £119m then to £48m and, finally, to the final break even position.
  • However, there remains an underlying deficit of £122.6m within the system that is not anticipated to be balanced during 2023/24 as non-recurrent means have been used to reduce the deficit position in-year. In this context, the system has agreed to produce a 3 Year Recovery Plan to show how it will improve the position in the first half of the financial year. There remains a level of inflationary and Private Finance Initiative cost pressure that is a risk to the position and which will need to be mitigated in-year.


What are some of the key links to other parts of the plan?

Finance links to all other parts of the plan. Work has commenced to ensure that priorities, metrics and deliverables in the plan are within the Financial Plans and all organisations will be held to account and monitored against these, with any risks to the financial position highlighted and mitigations identified.

Financial Governance – System Controls

Strategies and Plans

  • System Financial Strategy, incorporating:
  • Healthcare Financial Management Association (HFMA) Financial Sustainability Checklist;
  • Triple Aim Framework; and
  • Value based decision making approach.

Financial Revenue Plan and underpinning controls:

  • 2023/24 finance and contracting framework;
  • 2023/24 financial protocol (detailed process for expected outputs, behaviours and key financial controls for organisations in deficit);
  • Pay controls and agency cap.

Financial Capital Plan

  • Efficiency and Transformation Plans
  • General Practice Estate Programme

Partnerships and Services

  • Transformation Board
  • Digital Board
  • Estates Board
  • People Board
  • Elective Care Board
  • Accident and Emergency Delivery Board
  • Finance Advisory Board

Governance & Engagement Structures

  • Finance and Performance Committee
  • Commissioning, Planning and Population Health Committee
  • Audit Committee


Financial Governance – System Assurance

First Line

The ICB will continue to follow the NHS England finance protocol procedure for tight system financial control for 2023/24. This will include a System Prioritisation Panel to:

  • Manage the implementation of the double lock process, as outlined in the protocol, for any developments outside of plans or other expenditure for organisations in deficit monitored through the System Investment Panel;
  • Provide due diligence on all system business cases for new developments.

Monitoring delivery of the System Financial Strategy and System Financial Plan by FAB (operating as: monthly Strategic FAB, bi-monthly Tactical FAB and weekly Operational FAB).

Standing Orders, Standing Financial Instructions and Delegated Financial Limits.

Financial accounting performance metrics.

HFMA Financial Sustainability Checklist.

Better Payment Practice Code

  • Productivity review informed by:
  • Getting It Right First Time (GIRFT);
  • Model Health System;
  • ICS Patient Level Information and Costing Systems (PLICS) Dashboard;
  • Health Expenditure Benchmarking Tool.

Regular monitoring through the ICS Transformation Board to the Finance and Performance Committee of all ICB and system productivity and efficiency programmes, with quarterly exception reporting also to FAB.

Second Line

Coventry and Warwickshire Monthly Finance Report to Finance and Performance Committee.

ICS Transformation Board reporting to Finance and Performance Committee, minimum quarterly.

Integrated Finance and Performance Report to the Board of the Integrated Care Board.

Third Line

Monthly Integrated (Care System) Finance Return and Provider Finance Returns reporting to NHS England.

Quarterly NHS England financial stocktake.

NHS England Annual planning process (and triangulation of finance, activity and workforce planning).

Discussion of the 3 Year Recovery Plan with NHS England mid year.


What happens if we do nothing?

Current trends show that expenditure growth at the Acute Providers within Coventry and Warwickshire is outstripping income growth.

This does include some of the productivity loss and increased workforce supported by agency expenditure seen since 2019/20 as part of the trajectory.

There is also an increase within the position relating to the Mental Health Investment Standard (particularly within the CWPT position) and growth in packages of care, both of which are having a continued impact on the growth trend.

System income from NHS England commissioned services has been flat over the past few years and the forecast is that this will remain the same.

It is forecast that ICB allocations will increase at 2% per year going forward.

On this basis, the ‘do nothing scenario’ shows a widening gap and deficit for the system.

Developing the 3 Year Recovery Plan

To ensure that this does not become the scenario the system is working on a 3 Year Recovery Plan:

  • Production of the plan will take place in June;
  • Further refinement of the plan will take place in July as any implications are discussed across operational and clinical forums across the ICS;
  • Governance will be completed in August across health and social care to enable a plan to be produced for September 2023.


What will we be focusing on in the next 2 years?

Creating the conditions for financial balance and sustainability, including by:

  • Using Population Health Management data to develop an allocative approach to setting the system financial resource limit at a Place level.
  • Ensuring effective financial governance and controls.
  • Prioritising funding growth to out of hospital and preventative services, rather than traditional Acute hospital based services, in order to enable the growth in system resources to be invested in primary care, community services and mental health.
  • Developing and implementing a system financial risk share mechanism.

Enhancing productivity and value for money, including through:

  • Capital investment in digital tools and technology, improving the current estate and diagnostic equipment to improve efficiency and to support people at home for longer.
  • Addressing unwarranted variation.
  • Developing a quality and productivity dashboard to enable targeted support to GP practices and Primary Care Networks.
  • Supporting greater collaboration and integration through the redesign and integration of out of hospital and urgent care services.
  • Working jointly with Local Authorities in relation to market sustainability of care at home and residential for Individual Packages of Care providers to ensure value for money, capacity and quality of providers.
  • Joint working between the ICB and the two geographic Care Collaboratives to review and re-design commissioning arrangements for NHS Continuing Healthcare services.

System Transformation Programmes – Transformation Board established with key workstreams:

  • Improving Lives and Hospital Discharge Community Recovery Programmes are key programmes of work that need to be built into efficiency programmes on a recurrent basis.
  • Opportunity scanning to take place on other workstreams to pick up Model Hospital and other metrics.
  • Elective Care programme focused on Elective Recovery Fund delivery:
  • Specific programmes related to Dermatology, Ophthalmology and Outpatient Transformation are being prioritised.
  • Further diagnostic work to support increased productivity is in progress.
  • Urgent and Emergency Care Programme has been focused on winter and utilisation of additional funding:
    - Winter funds to be prioritised for performance during quarter 1 2023/24;
    - Programmes are focusing on the Urgent Treatment Centres, Falls, Emergency Department performance and Virtual Wards.
  • High Cost Drugs and Medicines Programme to monitor against hypothecated budget to ensure decisions on new treatments can be delivered – total savings across providers £4.2m.
  • Programmes on back office functions, Estates and Procurement in place:
    - Estates Programme focussing on capital and rationalisation;
    - Total procurement savings across providers of £18.8m;
    - Back Office Functions Programme will be refreshed to also support changes at the ICB.

Additional workstreams also in place to support specific delivery on programmes such as Cancer, Community Diagnostic Centre, Digital, Mental Health, Learning Disability and Autism, LMNS, etc.

A movement in the focus of expenditure to keep acutes at their current funding levels and enable a shift to community and primary care services.

Improvements to the funding levels supporting primary care, children’s services and autism, which remain key commitments for the ICB.

We will be conducting a thorough review of demand and capacity to ensure that the recurrent bed base supports the strategic vision.

Working with Local Authorities to understand the system health and social care financial position requiring open book financial review and prioritisation of all expenditure.

The system will use governance and controls including HFMA Financial Sustainability Checklist and local control protocols to ensure that plans are met or recovery plans are in place.

The ICS will develop an allocative approach to Care Collaboratives to ensure delivery within a suitable financial envelope.

Further work will be undertaken on how the health inequalities agenda can be assessed and supported with a health inequalities formula financial envelope being developed as part of this work. Recognising that this will be different to current finances, there will be an agreed period of transition towards this target with plans to be developed to ensure that service impact is minimalised.

Refreshing the System Financial Strategy as part of the development and implementation of the 3 Year Recovery Plan.

Development of plans for investments that the system has prioritised that can be ‘taken off the shelf’ when funding becomes available for both revenue and capital.

Digital implementation of the local PHM Platform creates a short term risk during implementation whilst there is the opportunity to have a single Electronic Patient Record System for acute providers and gain benefits for all in the longer term.


Key Challenges

High risk levels within the current System Financial Plan.

Making everybody a part of the financial challenge and having a culture that supports the system to transform.

Levels of recurrent efficiency achievement have not hit the levels of ambition within the 2023/24 System Financial Plan in recent years.

Effective use of clinical modelling and resource to support PHM architecture, as well as the ability to invest in this area.

Prioritisation with social care.

Tension between delivery of quality with workforce availability and the recurrent efficiency challenge.

Calls upon our core capital requirements, including digital, and the available financial envelope.

Inflation levels continue to be in excess of the allocation rate over the period of the System Financial Plan.

Coventry and Warwickshire continuing to be a net importer of patients from other systems through mutual aid, without additional financial support.

Recurrent funding confirmation for allocations aligned to the programmes for Urgent and Emergency Care and System Development Funding.

System commitment to supporting the Caludon Centre capital business case which far exceeds business as usual funding.

Level of ambition of the ICS Digital Transformation Strategy compared to national capital funding.

Operational recovery enables financial delivery and does not store up non-recurrent issues to get through the backlog.

As part of our route to balance we will need to consider whether we can continue to achieve all key metrics and will review the use of investment funds.

Growth in urgent care activity continues at previous rate, alongside concerns around inflation, pay and any further impacts of Covid/similar system shocks.

Ensuring that where investments have already been made the benefits are maximised and that any further investments are able to pay for themselves or be funded from a disinvestment programme.


How will we measure our success?

Key financial metrics for the underlying financial position.

Financial reporting as a system within the national returns, as well as the audited positions of organisations.

Confirm and challenge process with system organisations, supported by FAB Strategic, Tactical and

Operational Group meetings.

Increase in the proportion of ICB funding that is focused on prevention, out of hospital care and discharge. This will require targeted growth allocations, as well as some reinvestment of efficiencies released from traditional acute based care .

Real terms increase to the funding levels supporting primary care, children’s services and autism.

Identification of health inequalities expenditure will show increases to the overall expenditure and the focus of the ICB.