Strategic priority four: Managing our resources effectively
In a climate of increasing need for services and continuing pressures on budgets, it is vital that we make best use of available resources.
Financial information is a key element of our governance framework with financial performance for all delegated services reported at each of our IJB meetings. Budget monitoring of delegated functions is carried out by the finance teams in the City of Edinburgh Council and NHS Lothian, reflecting the EIJB’s role as a strategic planning body which does not directly deliver services, employ staff or hold cash. However, the IJB maintains oversight of the in-year budget position as this highlights any issues that need to be accounted for when planning the future delivery of health and social care services.
Each year we produce a financial plan which sets out how we ensure our limited resources are targeted to support delivery of our strategic plan. For 2020/21 our financial plan was agreed by the IJB in July 2020. Regular updates on financial performance were provided to the Performance and Delivery Committee as well as to the EIJB itself. Included in these reports were details of the financial impact of the pandemic and with the savings and recovery programme.
You will find a comparison of costs against the budget for the year summarised in the table below:
| Service | 20/21 budget (£m) | 20/21 actual (£m) | Variance (£m) |
|---|---|---|---|
| NHS delivered services | |||
| Community services | 126 | 127 | (1) |
| General medical services (GMS) | 90 | 90 | (0) |
| Prescribing | 79 | 79 | (0) |
| Reimbursement of independent contractors | 63 | 63 | 0 |
| Services hosted by other partnerships/NHS Lothian | 107 | 106 | 1 |
| Hospital ‘set aside’ services | 101 | 101 | (0) |
| Other | 33 | 31 | 2 |
| Subtotal NHS | 599 | 598 | 1 |
| City of Edinburgh delivered services | |||
| External purchasing | 157 | 165 | (8) |
| Care at home | 30 | 28 | 1 |
| Day services | 16 | 14 | 2 |
| Residential care | 22 | 20 | 2 |
| Social work assessment and care management | 15 | 15 | 1 |
| Other | 11 | 10 | 2 |
| Subtotal Council | 252 | 252 | 0 |
| Net position | 850 | 849 | 1 |
Whilst there is no doubt that we will continue to face significant financial pressures, we saw our previous improvements in financial planning and performance sustained during 2020/21 as we delivered a surplus of £1m against the budget for the year. These funds have been transferred to our reserves and will be carried forward to 2021/22 for prioritisation by the IJB.
Interpreting the financial results during a pandemic is not straightforward but it is evident from the table above that we continue to experience pressure in our purchasing budget. In the main this can be attributed to spot purchasing, predominantly care at home/care and support, residential services and direct payments. We saw growth in the purchasing budget during 2020/21 but this was largely in line with assumptions. The variance therefore relates to slippage in delivery of savings as the workforce was focused on continuity of service during the pandemic. Accordingly, the in-year savings target attributed to purchasing has been recognised in the 2021/22 financial plan and the savings target rolled over to 2021/22.
The chart below shows a comparison of costs in key areas for the last 3 financial years. The increases in certain categories from last year reflect the areas of additional spend to support the response to the pandemic.
The pandemic clearly had an impact on our finances, and this was closely monitored during the year. We incurred net additional costs of £40m as a direct result of the pandemic. The main categories of associated expenditure being:
- sustainability payments made to support providers during the pandemic;
- purchase of additional capacity;
- additional staffing and reimbursement of independent contractors;
- increased prescribing costs, and;
- slippage in the delivery of the savings and recovery programme.
In line with their commitment, these costs were met in full by the Scottish Government and are summarised below:
| £m | |
|---|---|
| Additional costs – Council services | Column 2 Value |
| Additional staffing | 2.0 |
| Additional capacity | 3.3 |
| Equipment & sundries | 1.5 |
| Loss of income | 2.2 |
| Personal protective equipment | 1.0 |
| Social care provider sustainability payments | 16.0 |
| Underachievement of savings (net of offsets) | 2.9 |
| Subtotal Council costs | 29.0 |
| Additional costs – NHS services | |
| Additional Family Health Services (FHS) prescribing | 2.5 |
| Additional payments to FHS contractors | 1.9 |
| Additional set aside costs | 4.0 |
| Hospices – loss of income | 0.8 |
| Staff bonus payment | 2.3 |
| Subtotal NHS costs | 11.5 |
| Grand total additional costs | 40.4 |
Although many of the delegated services are delivered directly in localities, a significant proportion are run on a city-wide basis. Showing how the associated costs are incurred within each locality requires a degree of estimation and assumption. This exercise shows that the cost of services is relatively consistent across the four localities, as shown in the diagram below.
The bed-based care project within our Transformation Programme is continuing the redesign of our bed base across the city, taking into consideration demand and capacity to ensure provision of sustainable bed-based services. The project has 8 workstreams relating to bed types, covering both medically led beds in hospital settings and beds located in the community led by social care staff.
Due to the size, scale and complexity of the project, a phased approach to project activities has been agreed. Phase one contains four workstreams (Intermediate care; Hospital Based Complex Clinical Care; Care Homes and Specialist Inpatient Rehabilitation), with a further four workstreams forming phase two (Respite; Palliative and end of life care; Mental Health and Supported Accommodation). No changes within our bed base can be made in isolation as they will affect different bed types across our estate and will have wider system implications, such as increased demand for Home Care and Reablement. The phasing took into consideration the impact changes would have on other service areas, the buildings and estate the services were located in, and the people cared for in the bed types.
As with much of our other work, the project was paused for a time during 2020 due to resource redeployment to support the pandemic response but was reinstated in June 2020. Further work was undertaken to gather data and evidence and a research phase was completed to understand other bed base models, demographics and population projections, and areas of good practice. Visioning workshops based on bed type were held with key stakeholders and service leads from each of the work streams. The outputs from the workshops were collated and key learning extracted to inform the bed-based strategy.
Phase one of the bed-based strategy will go to the EIJB for approval in 2021/22. Work will also commence on redesign options for phase two workstreams.