Health and social care integration: finance guidance

Guidance on financial matters relating to health and social care integration, for the assistance of health boards and local authorities.

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5 Terms and definitions

Accountable Officer (Health Board): this role is the responsibility of the Chief Executive in Heath Boards. The financial governance duties are specified in the Public Finance and Accountability (Scotland) Act 2000.

AME: Annually Managed Expenditure. Expenditure outside the revenue and capital resource limits which is managed annually because it cannot reasonably be subject to firm multi-year limits. This budget is restricted to property impairments, movement in pension valuations, provisions and depreciation on donated assets.

ASD: Analytical Services Division (Scottish Government).

Block Grant (Local Authority): Grant from the Scottish Government which funds approximately 85% of the net revenue expenditure of local authorities and consists of the revenue support grant, income from non-domestic rates and specific grants. The balance is funded from local taxation (e.g. Council Tax).

Chief Officer: Officer appointed by the Integration Joint Board in consultation with the relevant Local Authority and Health Board. The legislation prescribes that the Chief Officer is seconded to the Integration Joint Board from the constituent authorities. The Chief Officer is employed by the Health Board or Local Authority party to the Integration Scheme by which the Integration Joint Board was established.

CNORIS: A not-for-profit risk sharing scheme that is in place to meet the cost of clinical and non-clinical negligence claims, which has mandatory membership for Health Boards[5].

The Code: The Code of Practice on Local Authority Accounting in the United Kingdom. It constitutes proper accounting practice under section 12 of the Local Government (Scotland) Act 2003 and applies to all local authorities, joint committee and joint boards of principle authorities unless directed otherwise in legislation.

CRL: Capital Resource Limit. Capital budget allocation for Health Boards. Health Boards are required to break-even against their CRL on a year to year basis.

Direction (from an Integration Authority): A written instruction from the Integration Authority that an integration function must be carried out by a particular person, e.g. the Local Authority or Health Board which is binding on the recipient.

FReM: Government Financial Reporting Manual.

HSCDIIP: The Health and Social Care Data Integration and Intelligence Project commissioned by The Scottish Government from ISD to work with Health Boards, Local Authorities, Integration Joint Boards, and others to develop a longitudinal health and social care dataset which links health and social care data at individual patient/service user level. It's purpose is to support Strategic Planning

Host Local Authority: The Local Authority which hosts services on behalf of other local authorities within the Health Board area.

Host Partner: The Local Authority or Health Board which receives and delivers the delegated functions in the lead agency model of integration.

Integration Authority: The lead body or bodies for the integration arrangements which are determined by the model of integration, i.e. the Integration Joint Board, or Health Board, Local Authority or both as the lead agency.

Integrated Budget: Budget[6] for the delegated resources for the functions set out in the Integration Scheme as specified in legislation (See "notional budget").

ISD: Information Services Division (Scottish Government).

Integration Models: The two models for integration prescribed in the legislation, which are:

  • Delegation of functions to an Integration Joint Board ("body corporate"); and
  • Delegation of functions to one or both of the partners (lead agency).

Integration Scheme: The jointly prepared plan between the Local Authority and Health Board covering the Local Authority boundary (or more than one Local Authority and the Health Board) which defines the integration arrangements. Legislation (Section 1, 2 and 3) will prescribe that it includes the:

  • Model of integration;
  • The functions to be delegated; and any functions to be delegated in conjunction with those arrangements in a lead agency arrangement; and
  • The method for determining the initial and subsequent payment from the delegating to the receiving authority and certain other financial arrangements.

The legislation also provides for the Scottish Ministers to prescribe other matters that may be included in the Integration Scheme (Section 1 (3)(f)).

Integration Joint Board: Body corporate established by order of the Scottish Ministers as a consequence of an approved Integration Scheme (delegation of functions to a body corporate) (Section 9(2)).

Integration Joint Monitoring Committee (the joint committee): Joint committee of the Local Authority and Health Board established to monitor and scrutinise the delivery of the Strategic Plan (delegation of functions between partners).

LASAAC: Local Authority Accounts Scotland Advisory Committee

Large hospital services: This term refers to services which are provided in the exercise of the functions that a Health Board delegates under an integration scheme which are carried out in the area of the Health Board and are provided for the populations of two or more local authorities (as described in Section 1 (14)). Note that services provided in community hospitals do not ordinarily fall under this definition, but that exceptions are possible in cases where a material proportion of care is provided for the populations of two or more local authorities. This flexibility is provided for the administrative convenience of the Health Board and leaves unchanged the Integration Joint Board's authority to direct hospital spend and activity for the functions and services delegated to it. These must include the minimum list of inpatient specialities provided in Regulations, which it should be noted make no distinction in terms of place of care; hospital services included on the "must delegated list" in the Regulations are subject to the direction of the Integration Joint Board whether they are provided in a community hospital or any other kind of hospital.

Sum Set aside/Set aside budget: Activity based budget for commissioned hospital services used by the Integration Authority population as set out in the Strategic Plan. This is the amount required to be set aside by the Health Board for use by the Integration Authority (Section 13(3)).

ONS: Office for National Statistics responsible for classifying the Integration Joint Board for Accounts purposes.

Payment: Term used in the legislation to describe the Integrated Budget contribution to the Integration Joint Board and does not require that a bank transaction is made. In addition the term used to describe the resources paid by the Integration Joint Board to the Health Board and the Local Authority for carrying out the directed functions.

PAS data: Patient Administration System data.

PLICS: Patient Level Information and Costing System.

Prudential Code: The professional code of practice that informs Local Authority decisions on the funding of proposed capital investments.

RRL: Revenue Resource Limit. Health Boards are required to at least break-even against their RRL on a year to year basis. The RRL is determined by the NHS Scotland Resource Allocation Committee formula and is allocated to Health Boards through their opening revenue budget. Health Boards receive additional funding throughout the year relating to specific priorities and services.

Section 95 Officer: Statutory post under the Local Government (Scotland) Act 1973. The post holder is the Accountable (Proper) Officer for the administration and governance of the financial affairs of the Local Authority.

Strategic Plan: The document setting out the arrangements for carrying out the integration functions and how these are intended to achieve or contribute to the achievement of the relevant national health and wellbeing outcomes for the population of the Integration Authority. Where there are more than one Integration Authority within the Health Board area consideration will be given to the impact of the individual Strategic Plans on each other.

Statutory Mitigation: Statutory guidance issued by Scottish Ministers for the accounting treatment for specified transactions or types of transactions undertaken by a Local Authority. It may be issued where the accounting practice under the Code has been determined to result in an improper charge against the general fund in the Local Authority financial statements and thus has a consequential impact on the funding available for the provision of local services[7].

Unified Board Accounts Manual: Manual prepared by the NHS Technical Accounting Group and is intended to compliment the guidance contained in the FReM and assist Health Boards in the preparation of their annual accounts; but does not supersede the requirements of FReM.

TAG: NHS Scotland Technical Accounting Group

VAT: Health Boards and Local Authorities have a different VAT status under the VAT Act 1994. Local Authorities have Section 33 status whereby they can recover VAT on non-business activities; and Health Boards have Section 41 status, whereby they can typically only recover VAT incurred on services (in accordance with contracted out services regulations). Local Authorities typically recover a greater proportion of VAT than Health Boards.



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