Clause 21 - NHS England’s financial responsibilities

Part of Health and Care Bill – in a Public Bill Committee at 4:45 pm on 16 September 2021.

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Photo of Edward Argar Edward Argar Minister of State (Department of Health and Social Care) 4:45, 16 September 2021

I will be relatively brief because I am conscious of the fact that we have agreed to get through quite a few more clauses today, although I will try to address the points that hon. Members have made. One of the key issues at the heart of what I think the shadow Minister, the hon. Member for Ellesmere Port and Neston, was saying is around what happens if an ICB or a foundation trust spends beyond its limit. How does that work? What is the process? I am pleased that this brings some welcome clarity, rather than the fragmentation we sometimes see in accounting cashflow, following the cash processes at the moment.

First and foremost, local systems will be informed of their resource envelope at the start of the year and will be required to agree a plan that matches, or is within, that envelope. Therefore, all will start the year with a plan that sets out what is being delivered and how much funding they will receive to deliver those services. However, if overspends emerge within year, that should initially be resolved within the system by the individual organisation either finding offsetting savings or securing savings elsewhere within that system envelope. Through the financial duties imposed by the Bill, the system is encouraged to be collectively responsible for managing its funding envelope, moving away from what we often see at the moment, which is fragmentation in understanding how the money flows, and each organisation considering itself to a degree in isolation.

If the overspend cannot be managed within the system, NHS England and NHS Improvement can use the powers in the Bill to hold the system to account through mechanisms such as the system oversight framework and providing support via the recovery support programme, as well as more informal support from the local region. Additionally, individual trusts or FTs that are not working collaboratively within the system can be held to account using the provider licence and enforcement options available for breaches. Finally, of course, in extremis the Department of Health and Social Care can provide cash support to NHS trusts and FTs to ensure that services continue to be delivered.

The second concomitant part of the shadow Minister’s question was what action NHS England or the ICB can take in response to financial difficulties. Financial performance will be monitored by both of them, and in the first instance any difficulties will be resolved locally. However, as I have set out, tougher mechanisms or sanctions can be imposed on trusts that are not meeting their reporting and financial accounting obligations under the clauses.