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 riskthe benefit of acting collaborativelyspeed and flexibility;engagement of member practicescost

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

Drawdown for projects budgeted through the planning process Submission of Business Case to the QIPP and Performance Committee under the process administered by the QIPP Programme Manager. Simple cases affecting only one CCG which do not require ongoing monitoring can go to CCG Boards

Access to the Innovation Fund Eligible projects by submission of simple Business Case to CCG Governing Bodies. CFO to maintain a schedule of all schemes for reporting at Federated and CCG level.

Access to unallocated reserves and contingencies

CCGs to develop QIPP pipeline of projects

Dealing with risks and cost pressures CFO to keep under review and advise CCG Boards.

Different approaches are taken to the allocation of budget depending on the funds being drawn upon

• The Innovation FundEach 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 contingenciesThis 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

Project Definition Minor MajorDescription Less than £1m investment over 3 years

and requires outcome monitoring eg savingsand project was prioritised during business

planning

More than £1m investment over 3 yearsor is a significant change to projects prioritised

during business planning

CCG Specific Projects Approval required by CCG OLT Approval required by CCG OLT and by CCG Governing Body

Joint Projects Approval required by QIPP & Performance Committee

Approval required by QIPP & Performance Committee and CCG Governing Bodies

All Projects Standard business case templates are available from the Project Management Offi ce.These are proportionate to the size and complexity of the project.All projects must be signed off by the Finance Lead before submission for Approval

Approvals Process Guidance

MiniLess than £300k investment over 3 years

and investment onlyand project was prioritised during business

planning

Approval required by CCG OLT

Approval required by SMT

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 oversightThe following approval process provides that challenge at appropriate points and levels