Delivering the forward view - the middle years

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Following on from the recent publication of NHS Operational Planning and Contracting Guidance for an unprecedented two-year period, Blake Morgan Legal Director, Sarah Bricknell, provides a brief summary. 

Chiefly, the guidance:

  • Explains how the operational planning and contracting processes will now change to support Sustainability and Transformation Plans (STPs) and the financial reset announced in July, positioning STPs 'front and centre' in the delivery of financial balance, new models of care and wider system collaboration.
  • Continues the themes described in the Five Year Forward View (5YFV), aimed at improvements in care, financial balance and high quality delivery of core care.
  • Provides significant detail regarding the mechanisms and incentives that will be applied to allow organisations to access Sustainability and Transformation Funding (STF) and maintain financial balance.
  • Offers a two-year contracting round to a timetable which rolls forward the established Q4 (and sometimes Q1) contracting cycle with the aim of finalising contracts by 23rd December 2016, thus creating space to devote time to get on with service redesign and delivery.    

STP emphasis

The guidance establishes an environment not only of local organisational control totals but system control totals for each STP footprint, with the potential for organisations within STP systems to apply to NHS Improvements to be permitted to allocate funding on a different basis, as long as the overall system control total can be met. There is nevertheless a requirement that control totals are met at individual organisational levels and also that both the provider and commissioner sides of the system remain in overall financial balance at a national level. Organisations are to be held accountable for individual and system financial performance.

Two-Year Contracting Round

The two-year contracting arrangement is intended to be reflected in workforce, activity and performance assumptions, built out from the STP level and is underpinned by a streamlined process to arrive at agreements by the end of December. It is supported by a two-year tariff now published for consultation. For the first time there will be a single oversight process involving both NHS England and NHS Improvement with the aim of providing a 'unified interface' with local organisations to ensure effective alignment of CCG and provider plans. Jim Mackey of NHSI and Simon Stevens at NHSE (or delegated national directors) are part of an escalation process to resolve any contract disputes.

Nine 'Must Dos' and more…

The guidance reiterates the Nine 'Must Dos' from 2016/17 which remain priorities for 2017-19. In fact, in paragraph 11 of the guidance it is apparent that the nine 'must dos' actually break down into 37 or more significant tasks across STPs, finance, primary care, urgent and emergency care, referral to treatment (RTT) and elective care, cancer, mental health, learning disabilities and quality improvement. The scale of the task summarised in this section is self-evident.

The guidance annexes the current NHS mandate and a number of other framework and requirements documents to highlight the fact that the nine must dos are not the only organisational priorities. There are clear signals that the various oversight and regulatory bodies are trying to work in a more joined up fashion to ensure clarity and progress (paras 13 and 17). There is an intention to publish core baseline STP performance metrics in November 2016, which will reflect, in finance the need to evidence performance against control totals (individual and system), in Quality, A&E and RTT performance and in health outcomes and care redesign, progress in three strategic areas (cancer taskforce plan implementation, mental health 5YFV and General Practice Forward View) as well as reporting on bed days per 1000 population and emergency admissions per 1000 population.

The guidance expects the STP plans to support delivery of the metrics and to 'crisply articulate' tangible benefits to patients and communities. Commissioner and Provider plans will need to demonstrate a range of qualities, enumerated in paragraph 16, including, for the first time perhaps, a reference to consideration of how local independent sector capacity should be factored into demand and capacity planning from the outset and the local independent sector engaged throughout. There is also a need to consider the impact of new care models including how contracts with secondary care providers might be adjusted to take account of new MCP or PACS arrangements during the contract period.


Full draft operational plans are expected to be submitted on 24th November 2016, contracts having been issued which form a reasonable basis for negotiation on 4th November, which is also the date for formal publication of the final form of contract for this round.

The Money

Throughout the guidance there is reference to local organisational accountability, STP alignment and therefore a need for strong governance processes among STP leaders to ensure clarity as to how different organisations contribute to the system working and to track progress. Paragraphs 27-28 explain the ability to apply for money to shift between organisations and the methodology is further set out at Annex 5, while paragraph 29 indicates the prospect that some STPs may also seek to subdivide their footprints, perhaps acknowledging that there is more geographic shift required in some areas to make STPs work optimally. There is scope for continuing access to STF in a total sum of c.£3.6bn over two years, but only if organisations play by the rules set out.

The guidance emphasises a 'relentless focus' on efficiency during the two-year period, referencing a range of national programmes, including Rightcare, Getting it Right First Time (GIRFT) and the Carter productivity programme, which will shortly be extended into Mental Health and community services.

The Tariff, on which consultation is taking place, assumes a cost uplift of 2.1% to address a range of factors in workforce and drugs cost increases, with an efficiency deflator of 2%, making the real terms uplift 0.1%.

Paragraph 49 signals a reliance on the Best Possible Value framework to support investment decisions and paragraph 50 highlights a fact becoming increasingly clear in healthcare commentary every day, that capital funding is 'very challenged'. The guidance states that STPs will enable a clear view of how capital funding can deliver transformation and signals additional capital guidance for providers and commissioners to follow.

Specialised Services

In relation to specialised services, the commissioning intentions have been published at the same time as the planning guidance, and the guidance states that the new specialised services framework will allow STPs to include the contribution of specialised care to population-based health and outcomes, and indicates that the contracting approach for specialised services is aligned to implementation of the Carter Review. The Specialised Services Commissioning Intentions also reflect the role of STPs in the possible future of specialised services commissioning, which will for the time being, proceed at local, national and some STP levels.


Finally, in relation to CCGs there is acknowledgement that their role will continue to evolve. The guidance states that 'as new care models are established, the boundary between what is done by CCGs and new care providers will shift' but that there will continue to be a need for an effective commissioning function in the NHS. NHS England commits support for CCGs during the process of setting up new care models to 'ensure that they have the capability and capacity to operate effectively in the changing provider landscape'.   

Our Chairman, Bruce Potter blogged* immediately after the guidance was published, noting that the challenges are huge, but the message to STPs and everyone in the system is crystal clear: we need to just do it!

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NHS Planning Guidance Chart

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