About pooled budgets

The IPC programme aspires to a future system of health and care that empowers and supports individuals to manage their own health and live better lives with the support they need. However, the commissioning of the services people with health and social care needs used is divided between CCGs, local authorities and others. This fragmentation often makes it difficult for commissioners to design and deliver person-centred, coordinated care. Pooling budgets between commissioners is one practical way to overcome this fragmentation and to enable joint commission across the system.

There are legal duties on both NHS bodies and local authorities to work together to get better value from the resources available across health and social care and to improve health and wellbeing outcomes for their populations. These can include the delegation of NHS and local authority functions and pooling resources under Section 75 or through payments made to a local authority under Section 256, both of the 2006 Act.

While these flexibilities have existed for some time, they are often poorly understood and not well implemented in practice with perceived complexity often seen as a barrier despite the benefits. Audit Commission research has found that pooled funds are most commonly in use for people whose needs cross the health and social care divide but that joint expenditure accounts for a relatively small amount (only 3.4 percent in 2007/08). However, this does vary considerably by location with some areas pooling all NHS and social care funds.

Under a pooled budget, one party can take the lead role in commissioning, whereby partners agree to delegate commissioning of a service to a lead organisation that acts on their behalf. For example, a CCG can manage an NHS and social care budget to achieve a jointly agreed set of aims aligned under a single commissioning function. Section 75 also enables integration of provision, where resources and staff are combined to deliver a service from managerial level to the front line, with one party acting as the host. For example, this could enable a CCG to fund a local authority to carry out some or all of the duties associated delivering personal health budgets.

Section 256 of the 2006 Act enables CCGs to make payments (service revenue or capital) to local authorities to support specific services. This is a grant for additional local authority spending, not a transfer of health functions. The provision can be used to create joint budgets for integrated services so long as the NHS ensures the arrangement represents a more efficient use of resources than if an equivalent amount was used directly for NHS services.

Pooled budgets will be helpful when delivering integrated personal budgets for IPC but their absence should not prevent progress being made. Services can be jointly funded through an aligned budget to meet agreed outcomes where funding streams remain separately managed. This requires neither a Section 75 agreement nor a payment made under Section 256. Under such arrangements, there is no delegation of functions and no host partner, and therefore each party’s statutory duties remain their own. However, such options can be useful given the perceived complexity time required to enter into formal pooled funding arrangements.