CCG Process for approving business cases and the draw down of Budget October 2013

What are the circumstances when approval for budget drawdown is required? Most CCG budget is already committed and transferred to budget lines through the setting of the Operational Plan Some budgets remain in CCG reserves awaiting drawdown – Specific reserves for QIPP Projects already prioritised within the plan, but where the business case is to be developed and signed off. – Innovation funds – Unallocated 2% Headroom – Contingencies This paper outlines the process with the aim of minimising bureaucracy and maximising control

The principles underpinning this process are detailed in CCG Constitutions No CCG can make a decision which will cause it to breach its statutory financial duty The CCGs will agree annually any risk sharing or budget pooling arrangements The CCGs will decide which decisions to reserve to themselves and which to take as a federation dependent upon: shared financial risk the benefit of acting collaboratively speed and flexibility; engagement of member practices cost

As a reminder the current agreed process requires all projects to be approved by the QIPP and Performance Committee, but this does not fit with the way we now do business

Different approaches are taken to the allocation of budget depending on the funds being drawn upon The Innovation Fund Each CCG has developed local governance arrangements for this purpose CCG Contingencies, including unallocated 2% These funds are applied initially at the discretion of the CFO during monthly closedown in order to support the forecast expenditure position. This is reported subsequently to OLTs and Governing Bodies within the monthly performance report. Any contingencies remaining unused will be monitored by Governing Bodies who will direct the priorities for their use as forecasts crystallise. Examples of use might be to bring forward QIPP plans, to provide one off system support or transformation expenditure. Unallocated 2% may also require Area Team sign off. Budgets held in specific investment reserves and unused contingencies This is the area which will be subject to the process.

The principles of the process were discussed by the QIPP and Performance Committee in July and recommended for approval to Governing Bodies by the Audit Committee in September

Why is it good practice that a QIPP Business Case is required? It is essential that CCGs can demonstrate delivery of QIPP projects - this begins with a well worked up business case and project plan. Prioritisation during planning is usually on the basis of very high level assumptions and is not appropriately rigorous for sign off. This requires expertise in the development of the case - but scrutiny and challenge is also essential Clinical challenge – effectiveness, evidence base Technical Challenge – stakeholder involvement, outcome measures, legislative framework Financial challenge – alignment with financial plan, validate project assumptions Independent challenge – Lay member scrutiny, governance oversight The following approval process provides that challenge at appropriate points and levels