Capital collaborations between the NHS and local authorities


Closer working through service integration and STPs has led many to ask whether capital collaboration with local government could be the answer to the ever-tightening NHS capital budget. Rob Whiteman challenged local government treasurers to engage more fully in STPs at a recent retreat, and this seemed an ideal subject for the CIPFA-HFMA Integration Network to explore together.  

Encouraged by former HFMA president and Director of Finance at George Eliot Hospitals NHS Trust, Shahana Khan, a workshop was held with representatives from the NHS and local government in Warwickshire alongside colleagues from the Department of Health, NHS Improvement, the HFMA and CIPFA. What quickly became apparent was that very few participants had knowledge on all aspects of the system, particularly the constraints, risks and motivations of other types of organisation, and that to encourage joint working to take place it is important to bust some of the myths and to provide a clear explanation of the various regimes. It was described as a ‘jigsaw puzzle’ in which each of the participants holds only one of the pieces which need to be joined together to show the bigger picture.

It became clear during discussion that using Local Government cash balances or borrowing powers to finance NHS assets is unlikely to be the magic bullet everyone is seeking. Such resources are not necessarily freely available, and even if they were, the operation of the Capital DEL at national level in the Department of Health means that NHS assets, however financed, are ultimately constrained. However, joint capital projects can have major benefits for promoting joint working, making best use of the skills and assets available within each sector and developing effective integration initiatives.

The workshop concluded that there was much to be done to help both sectors understand each other better and to support capital collaborations. To this end, a joint briefing note has been produced (PDF, 348 KB). Andrew Baigent from DH and Sean Nolan, CIPFA’s Director of Local Government and Policing, presented this to the NHS Improvement meeting of NHS provider Directors of Finance in June.

Speaking about the project as a whole, Shahana said "Innovation is the Invention of necessity! Pressures on NHS finances, the lack of cash at the local level and national capital limit constraints have meant that we have had to explore new and innovative ways to fund capital investments. It has also afforded us the opportunity to work with local government partners, to whom we should have been speaking long before this."

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