‘No legacy debt’ pledge does not live up to Lansley’s promise

In the wake of Andrew Lansley’s promise that clinical commissioning groups would not be saddled with legacy debts, primary care trusts were tasked with setting aside funds to pay for future continuing healthcare claims. It was unclear how much would be needed to meet the claims – brought by patients who self-funded but later realised they were entitled to ongoing care outside hospital for long term complex needs – but PCTs earmarked a combined total of £650m.

‘The age of austerity will continue for the foreseeable future and spending reductions will clearly become more difficult’

However, HSJ has learned that the money contributed to the Department of Health’s surplus and so was handed back to the Treasury, where it was instead used to pay down the national deficit. CCGs will not be able to access the money. They will now be required to pay into a “risk pool” via a 0.4 per cent topslice on allocation in 2014-15 to create a fund to settle claims.

In areas where the PCT set aside funds, commissioners will effectively be paying twice. And areas that believed they would not face claims and did not set aside funds will have to pay regardless of whether they do face a claim.

One focus

It means that £650m was effectively cut from health spending, notwithstanding protection of the health budget relative to others.

‘So far as CCGs are concerned, the only recourse will be to consider the legal fallout’

It is unlikely this was a deliberate tactic to divert money to the Treasury. But it is surprising that CCGs are being asked to find funding for continuing healthcare, given Mr Lansley’ “no legacy debt” promise. The DH’s frustration will be second only to that of CCGs, which are left to pick up the tab, and those who while at PCTs prudently put the money aside.

The situation does give a glance of what is to come. The age of austerity will continue for the foreseeable future and spending reductions will clearly become more and more difficult. While the DH must focus on quality of service in the post-Francis era, the Treasury only has one focus. In this climate there will be no room for oversights – lapses will be punished.

So far as CCGs are concerned, the only recourse will be to consider the legal fallout and whether there are any arguments to be made about liability.