£3.8bn NHS Better Care Fund policy delayed after damning Whitehall review
Review concluded that claims for policy to bring together health and social care services 'don't stack up'
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The Better Care Fund was meant to reduce the growing pressures on hospitals and keep people healthier in their own homes. Photograph: Christopher Furlong/Getty Images
A government policy intended to stop the NHS from becoming overwhelmed has been delayed after a confidential Whitehall review concluded it would not work as hoped. Neither would it help to balance the NHS budget or bring about an intended revolution in patient care.
The £3.8bn-a-year Better Care Fund was supposed to have been launched last week, but its introduction has become mired in doubt after the Cabinet Office voiced deep disquiet about its viability and argued that there was little or no detail about how the expected savings would be delivered.
A Whitehall source said the Cabinet Office believed that the claims for the Better Care Fund did not stack up and wanted "a lot more work done on the policy".
The idea behind the plan, due to be introduced in April next year, was to bring together health and social care services – traditionally funded by local authorities – in the belief that this would reduce the growing pressures on hospitals and help keep people healthier in their own homes.
The delay in its launch is a setback for the health secretary, Jeremy Hunt, and local government secretary Eric Pickles, who were supporters of the plan and had been due to attend its launch last Wednesday.
The Better Care Fund is partly funded by the Department of Health, which was to have contributed £1.9bn from the £40bn hospital budget from next April in the belief that it would release savings to compensate for the money transferred from the NHS.
However, the Guardian has learned that the Cabinet Office review found that plans to save money from local hospital budgets by moving care elsewhere lacked financial credibility, with little or no detail about how savings would be delivered.
Now a team of officials from both departments responsible for the new policy have been told to produce extra evidence to make it more "credible" and overcome deep Cabinet Office scepticism.
Starting in April 2015 in England, the initiative was meant to cut both overcrowding in A&E units and the number of people admitted for hospital treatment. Half of the £3.8bn annual budget would come from the NHS, with all of the money going into schemes that see health and social care services working together in a major step towards the goal of integration.
Projects would help keep frail, older people and those with long-term conditions such as diabetes and breathing problems healthier in their own homes and avoid expensive, unnecessary stays in hospital. Ministers described the new approach as vital to keep the NHS sustainable.
The Cabinet Office also voiced concern that hospitals have been consulted far too little about the plans, while local councils and the GP-led NHS clinical commissioning groups have drawn up local plans.
A Whitehall source familiar with the situation said: "The Better Care Fund is based on the idea that if you invest to build up services outside of hospitals based on integrated care, that will help you to ultimately save money from the hospital budget. But the plans produced so far don't show in detail where savings will be achieved as a result of the investment, or that hospitals will be able to reduce their spending.
"Because they don't, the Cabinet Office don't think the plans produced so far are credible enough and don't have enough information in them about how the savings will be made, or detailed enough forecasts."
Launching a report last week by the King's Fund health thinktank which argued that the NHS was on the brink of a major financial crisis, its chief executive, Prof Chris Ham, criticised the Better Care Fund, as currently envisaged, as "completely unrealistic".
Ham, a member of David Cameron's short-lived group of NHS advisers, said hospital budgets could only be reduced if much more care was already being provided by GPs, community nurses and staff who support patients in their own homes. But "the difficulty is that under the government's plans all of this has to be done in time for plans and budgets to be agreed for 2015-16. This is completely unrealistic".
Taking the £1.9bn away from hospitals "will put additional stress on an NHS already struggling to balance the books and maintain acceptable standards of patient care," Ham said.
Sir David Nicholson, the NHS chief executive when the fund was first announced last year, had described the pooled £3.8bn budget as "a game-changer" for the way patients would receive care, but warned that it involved a potential "financial cliff edge" for hospitals.
Many senior NHS figures fear that the money will be used by local councils to help alleviate the deep cuts they have seen to their budgets under the coalition. Prof Sir Bruce Keogh, NHS England's medical director, has admitted that there is "great scepticism" in the NHS that it will fund the sort of projects intended and "fear that the labels will be taken off the money and that it will be used for filling in potholes and other significant things".
Last week, Bill Shields, the chief financial officer at Imperial College Healthcare NHS trust in London, one of the largest NHS hospital groups, said: "The cynic in me says that this is a way of taking money from the NHS and passing it on to the local authority vote. The expectation is that this will allow them to make good the cliff edge they've been through in the last few years and rebuild the local government public finances." It would also mean "in effect a significant real-terms reduction in NHS income … going forward", he said.
The Department of Health's own guidance on who should receive the £1.1bn it is putting into social care this year, including £200m for the Better Care Fund, appears to confirm that it is in effect shifting money from the NHS straight to local councils. The guidance, published on its website, says that projects eligible for a share include those which "would be reduced due to budget pressures in local authorities without this investment".
A Conservative health spokesman said: "This government is finally doing what the last government talked about but never delivered: joining up the health and social care systems. The Better Care plans start from April 2015 but we asked for early versions to be completed a year early so we could check their level of ambition and deliverability, which is what is happening."
Andy Burnham, the shadow health secretary, said: "Under this government, health policy seems to lurch from one shambles to another. This is further evidence that you can't trust the Tories with the NHS. After a botched £3bn re-organisation, the NHS simply could not afford to rush ahead with these back-of-the-envelope plans.
"This was a panicked response to Labour's plans for full integration. It was never properly thought through and was set on a dangerous and unrealistic timetable. This news will only deepen confusion in the NHS about government policy. It is suffering from a real lack of leadership when it desperately needs a clear direction at a time of tight finances. David Cameron and Jeremy Hunt must urgently clarify the status of the Better Care Fund."
Richard Hawkes, chief executive of the disability charity Scope, said: "Ministers have built up the Better Care Fund as the answer to the care crisis … Chronic underfunding and year-on-year rationing of care have left the system on its knees. Earmarking NHS cash for care was a bold move to stimulate innovative ways of working.
"But for the Better Care Fund to live up to the billing, we need to see a commitment to serious, ongoing investment and a strong focus on preventing people becoming isolated and slipping into crisis. The government's flagship care bill could make a real difference. But the reforms are at real risk."
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