Ringing the changes for NHS planning


By Jane Payling, Head of Health and Integration, CIPFA

Following calls from the service, the NHS planning framework is changing significantly for 2017/18 – starting and finishing earlier and covering a longer period.

Joint working at national level is demonstrated in the single overview document, issued by NHS England and NHS Improvement, which sets out the context and high level requirements. This is accompanied by joint technical guidance for commissioners and providers, alongside a range of technical annexes setting out the details on a range of areas including the Commissioning for Quality and Innovation payment (CQUIN), dispute resolution and specialised commissioning.

NHS finance teams have got used to waiting for their early Christmas present in the form of the planning guidance, which invariably arrived on the last working day before the break. This year’s guidance, issued in late September, brings forward the usual process by three months, aiming to help improve planning, ensure contracts and budgets are in place before the beginning of the financial year, and help relieve the pressure on finance teams who are also involved in producing the annual accounts.

Several previous attempts have been made to extend the length of time covered by the plan with varying levels of success. The crucial difference for 2017/18 is the move to agreeing two year contracts between providers and commissioners, accompanied by a two-year national tariff. Greater certainty regarding the level of price uplifts and efficiency requirements will help organisations to plan more effectively beyond the next financial year.

Main elements of the timetable



Guideline and accompanying detail issued 22 September
Provider Control Total and Sustainability and Transformation Fund (STF) allocations published 30 September
Submission of sustainability and transformation plans (STPs) 21 October
Operating plan forms issued 1 November
NHS standard contract finalised 4 November
Commissioners issue initial contract offers that form a reasonable basis for negotiations to providers
4 November
Providers to respond to initial offers from comissioners 11 November
Operating plan submission (full draft) 24 November
National deadline for signing contracts 23 December
Submission of final 2017/18 to 2018/19 operational plans, aligned with contracts
23 December
Submission of joint arbitration paperwork by CCGs, direct commissioners and providers where contracts not signed
By 9 January
Contract and schedule revisions reflecting arbitration findings to be completed and signed by both parties By 31 January

Key points

  • Nine ‘must-dos’ issued in 2016/17 continue for 2017/18 and 2018/19; the first two being progressing STPs and finance.
  • Expectation of financial balance at national level in both commissioning and provider sectors in both years.
  • Control totals to be issued at organisational level and STP level (which is equal to the sum of the individual organisations) – can request a sub-STP total if large, and can move resources around with the agreement of NHSE and NHSI.
  • Where control totals are accepted, contract sanctions such as fines for target failures are suspended; this will continue until April 2019.
  • STPs to be the route map for making a reality of the Five Year Forward View, operational plans to be aligned with STP and form first two-year formal delivery plans.
  • STP leaders expected to have strong governance processes in place regarding system compliance, progress checking and joint working.
  • STPs to agree trajectories for two years against a number of areas, including ensuring plans and finances link, setting out measurable impact of STP, describing how they envisage better integration between health and social care and estates strategies.
  • Standard contract to remain largely unchanged. 
  • All (including FTs) to follow a single, NHS arbitration process; where not followed, providers will forfeit an element of STF funding, commissioners will lose quality premium and transformation monies.
  • 2.1% cost pressures, 2% efficiency for both years.
  • No increase to education and training tariffs; one-year supplementary tariff relief on 2016/17 reductions will not continue (so effectively these payments will go down by 2%).
  • Transformation funding to be increasingly targeted towards the STPs making most progress.
  • Capital funding is very tight; STP areas need to demonstrate how to procure more effectively, dispose more quickly and extend asset lives.
  • CQUIN continues at 2.5% of contract value; 1.5% on national CQUINs; 0.5% for "full provider engagement and commitment to the STP process" (stated as "cost free" indicator with "clear scope for earning the full amount"); remaining 0.5% to be retained in CCG risk reserve pending achievement of control total.
  • New specialised services framework that aims to enable STPs to include the contribution of specialist services to population-based health services and outcomes.


No one was expecting the planning guidance to signal an end to the challenging financial outlook facing the NHS, as the overall levels of growth is set to reduce in 2017/18 and 2018/19 compared with 2016/17. However, there are a number of things in the guidance which will be welcomed. Calls for a longer contracting and planning period have been heard and acknowledged, at least in a limited way, through the move to two year contracts and operational plans. Earlier guidance and contract signing deadlines should help ease pressures on health organisations, providing time for more effective planning and discussions and bringing them closer in line with their STP partners in local authorities. It will also help finance teams spread the workload more evenly, so reducing the pressures over financial year end.

The importance of STPs is emphasised strongly, and their progress is given a boost through CQUIN incentives for "full provider engagement and commitment to the STP process". The issuing of STP-wide control totals, made up of the sum of the constituent organisations, should cement STPs more strongly as the system leader. However, some of the expectations stated of STPs, particularly those requiring "strong governance processes" are likely to need more national guidance to ensure they happen effectively in local systems.

Positive tariff uplifts of 2.1% for both years will be welcomed following many years of tariff deflation, as will the reduced efficiency requirement (2%). There is, however, a range of cost pressure ‘smoke’ to be consumed in the coming years, including new pressures such as the apprenticeship levy. As the document states, "the expectation is that providers and commissioners will have a relentless focus on efficiency", a focus that is going to be increasingly required to achieve the stated objective of financial balance in both the provider and commissioner sectors in 2017/18 and 2018/19.

With STPs now submitted, it remains to be seen how the service will respond to the changes. There is a danger that the brought forward deadlines won’t be seen as credible, and the old pattern of waiting until the end of March to agree contracts will continue. If this is the case, the NHS will have missed an important opportunity to take a step change forward.

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