BRIEFING NOTE ON STRATEGIC COMMISSIONING AND POOLED BUDGETS

Children’s Trust Pathfinders are being encouraged to develop “Pooled Budgets” using Health Act flexibilities.A Children’s Trust Pooled Budget may bring money together from local authority and health service budgets into a discrete fund. The pooled budget may cover budgets currently managed by Social Services, Education, PCTs, Mental Health Trusts and Health Care Trusts.

The pooled budget could be used for the strategic commissioning a range of services. The Trust may choose to commission services from existing service providers under a service agreement or contract or the Trust may commission integrated services and ask an existing or new service provider to manage the new integrated service.

Key Principles of  Pooled Fund Arrangement

“ Regardless of what contributions NHS bodies or local authority(ies) commit to the pool, the pooled resource can be used on the agreed services as set out in the partnership agreement. This will mean that expenditure will be based on the needs of the users, not on the level of contribution from each partner. This gives pooled budgets a unique flexibility, whilst being bounded by agreed aims and objectives.”

DoH Guidance on Health Act Section 31 Partnership Arrangements

Pooled Budgets make sense:

• When developing integrated teams made up of staff from different agencies. A pooled budget for these services indicates integration “from the top”.
• When integrated teams hold budgets for purchasing services for individuals. By creating pooled budgets for micro-commissioning or spot purchasing the money can follow the needs of the individual rather than being attached to specific service areas.
• When there is scope for reducing overlap and duplication or achieving economies of scale. Any savings accrued is returned to the “pool” rather than one agency taking advantage at what might be another agencies cost.
• Where a holistic multi agency approach is needed to achieve more positive and cost effective outcomes for children and young people. One agency cannot do this on their own. A pooled budget can provide the impetus and framework for developing alternative services and ways of working.

Pooled Budget Agreements

The Pooled Budget agreement will set out information on the services being commissioned, which groups or children and young people will have access to these services and the outputs and outcomes being sought.

It will include details of:

• Aims and Objectives of the Pooled Budget - what the budget will achieve – being specific about outputs and outcomes.
• Functions covered by the pooled strategic commissioning budget.
• Level of contribution to the pooled budget.
• Arrangements for managing the pooled budget.
• Arrangements for commissioning and contracting.
• If agreement covers integrated provision will need to cover financial issues and HR issues such as terms of secondments, management structures, professional supervision, HR policies and procedures. It will also need to cover care practice and clinical governance so that service quality and standards can be assured.

A Children’s Trust may also want to consider Lead or Joint Commissioning arrangements.

Lead Commissioning

Guidance refers to lead commissioning taking place when decisions are delegated to the local authority and made through the local authority decision making process. A budget could be transferred for a specific purpose (through Section 28A arrangements) or the local authority could act as a lead commissioner with a pooled budget.

Joint Commissioning

Decisions could be made by all parties through a joint body such as a Children’s Trust or Partnership Board. Alternatively, ratification of decisions may be made through the separate decision making processes of different agencies.

If decision making is being delegated to the Children’s Trust Board then the Constitution of the Board will need to ensure there is clarity about what decisions are being delegated and how the Board will decide on these matters in the future.

Joint Commissioning can be used as a stepping stone towards pooled budgets:

STAGE 1: Making joint plans for strategic commissioning and then presenting joint recommendations to existing decision making bodies.

STAGE 2: Ring-fencing certain budgets and delegating responsibility for decisions to the Children’s Trust Board.

STAGE 3: Shadow Pooled Budget Arrangements

STAGE 4: Pooled Budgets

NB Remember the Children’s Trust Pathfinders are being encouraged to develop pooled budgets.

Click here to download Pooled Budgets Briefing