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Preparing for a budget of £230m

Emma Wilkinson spoke to Dr Stewart Findlay about how real budgets are shaping up in his area

What is being proposed in your area?

Our plans cover the whole of County Durham and Darlington, which has around 600,000 patients across six PBC clusters.

We are taking over responsibility for everything with a tariff, so that's elective and non-elective referrals and prescribing and comes to some £230 million. It leaves out all of mental health and community contracts and any block contract element that applies to our hospital trust. Further down the line, if we manage these budgets OK, we have been promised the other budgets.

On the PBR tariff part of the budget we're going to base it on the 09/10 budget and we are going to ask practices to bring referrals in line with 08/09 levels over that first year in order to make the necessary savings. There are vast differences in funding in this county - one area is underfunded but never manages to spend it while another area overspends despite being overfunded – so over the next few years we are going to move to fairshare budgets.

Moving to real budgets was a natural step as the GPs within the six clusters have had close links for years and meet regularly both as clusters of practices but also across established clusters.

How was the move viewed by the different stakeholders?

Our chief executive realises this as the only way to deliver the QIPP agenda. Some PCT directors still think they can control everything centrally. We hope that if we can deliver success in the first year, the remaining budgrts will be devolved next year.. One or two practices have said they will opt out of real budgets and that does raise a governance issue. It may be the cluster in those areas takes over the budgets for those practices. At this point we are going to try and work with those practices to influence them by encouragement and peer support. But in the future, particularly if there is a Conservative government they're not going to be able to opt out without some kind of financial penalty. I think they are mad for not getting involved now. There is no risk in terms of GP income and there is the potential to be able to provide some services in house. The local hospitals are of course worried about losing services and income, but by working with us they can keep on top of what's happening and will be able to plan for those changes.

How are you preparing for them?

At the moment there is no link between those who spend the money and those who manage the money. We're in discussions about new ways of working to enable GPs to utilise the PCTs' resources in order to help them run the budget. We are also going to have a scheme in place to get practices some extra income to reflect the extra time involved.

We are going to set up a federation board of the PCT and chairs from each of the six clusters in the area. We have decided that if one cluster overspends, the other clusters will bail them out. So the savings will only come after we've bailed out those clusters but after that we get what's left to reinvest in patient services. This will be done as a contractual arrangement between existing organisations rather than a new legal entity. But our cluster, in the Dales, is already a limited company so we could use that for provision of new services if we choose to.

What level of risk is involved?

There is no risk in terms of GP income -if we don't balance the budget that does not affect our GMS income. There is a risk for GPs in terms of getting blamed for any overspend but we shoulder that blame already as it is GPs that spend the local NHS resources through their referrals and their prescribing..

The risk in terms of not achieving our goals is on non-elective admissions. That is a huge risk and they're rising year on year. Some of those referrals are taken out of GPs hands because they happen through A&E or urgent care or nursing homes. These admissions are not well controlled currently in many areas. But I do think that by allowing GPs to manage their budget they will come up with ideas themselves for managing admissions in new ways. Also by giving practices the ability to negotiate with providers we'll be able to set up more in-house services – and GPs locally are very keen to do that - which will be more efficient. I don't actually expect referrals to go down dramatically but I hope that costs will.

Dr Stewart Findlay is chair of Durham Dales PBC cluster. Emma Wilkinson is a freelance journalist

Dr Stewart Findlay