Annex A > Chapter 6 - Funding and Resources > Supra regional funding for the under-1s
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Supra regional funding for the under-1s
80 Throughout the period 1 April 1984 to 31 March 1994, funding for the service for children aged under 1 year came from a fund managed centrally by the DoH: the Supra Regional Services Fund. With effect from 1 April 1994, supra regional funding ceased. [115]
81 The financial effect of a service being designated as supra regional was that the money already being spent on that service by each of the designated supra regional centres was identified and `protected' within the RHA's allocation for the following year. `This meant that the region is obliged to make that amount of money available to the appropriate district for expenditure on the designated service.' [116]
82 When allocations were made for second and subsequent years, the total allocation for the previous year was increased in line with inflation and was again `protected' within the RHA's allocation.
83 The allocations made were as follows in Table 7:
Table 7: Supra regional services paediatric cardiac surgery allocations -
Bristol (cash value at the year indicated)
| Financial year | Allocation (£) (cash value as at the year allocated) |
| 1984/85 | 705, 000 [208] |
| 1985/86 | 784, 000 |
| 1986/87 | 341, 000 |
| 1987/88 | 492, 000 |
| 1988/89 | 573, 000 |
| 1989/90 | 602, 000 |
| 1990/91 | 689, 000 |
| 1991/92 | 1, 818, 000 [209] |
| 1992/93 | 2, 019, 000 |
| 1993/94 | 2, 048, 000 |
| [208] An estimated figure provided by the BRI [209] UBHT 0277 0276; capital charging was included. A description of capital charging is at para 15 |
84 In determining the initial allocations to be `protected' when the service was first designated, the Supra Regional Services Advisory Group (SRSAG) was dependent on financial data provided by the relevant regional treasurers. However, from 1985 onward, it moved towards an allocation system in which requests for additional funds were compared with workload costings. RHAs were allocated the amount they requested, or the costed workload, whichever amount was the lesser. [117]
85 The SRSAG initiated a study of the services provided in each unit and the cost involved, so that recommendations might be made at a later date as to the level of expenditure to be protected during 1984/85 and funding levels for 1985/86. [118]
86 In his written evidence to the Inquiry, Mr Angilley [119] stated that the actual and forecast financial workload data sent in by the SRS centres was the basis for the following years' SRS (supra regional services) funding. [120]
87 Using activity data supplied by Mr Wisheart, Dr Joffe and Dr Jordan (`with slight amendments for details supplied by the nursing staff in both the Children's Hospitals and the Bristol Royal Infirmary') [121] the costs in Bristol for the years 1983/84 and 1984/85 were calculated. [122]
88 The protected funding level for 1985/86 was notified to the SWRHA in January 1985. [123] The allocation for Bristol was £784, 000: the fifth highest allocation of the nine centres in the UK.
89 In December 1984 the first meeting of representatives from each of the nine centres designated to provide NICS discussed the definition of the protected service and the system for collecting information about expenditure and workload. [124] The representatives were invited to report on the current situation within each unit and the problems that they were encountering. The representatives from Bristol were Dr Joffe and Mr Wisheart. They reported that:
`The children's hospital dealt with Supra-Regional specialities of various kinds. The surgical work was carried out at the Bristol Royal Infirmary which treated only adults. Additional staff were needed since there was only one fully dedicated paediatric cardiac surgeon and there was a shortage of nursing staff. A large amount of "soft" money had been used for the purchase of equipment; on the surgical side: the RHA was embarking on an extensive programme of expansion, and plans for the development of paediatric surgery lay within the development of cardiac surgery generally, which has obvious nursing and manpower implications.' [125]
90 Further information to assist regional general managers in the funding of SRS was supplied by the Department in its paper RGM(85)9. [126]
91 In March 1985 the SWRHA wrote to Dr Roylance (then the District General Manager of B&WDHA) seeking information on workload and expenditure to be used in calculating the allocation for 1986/87. [127] In August, Dr Ian Baker (then District Medical Officer, B&WDHA) supplied completed schedules showing the statistical and expenditure data for NICS. [128] Dr Baker indicated that an expansion of the workload for NICS was planned in 1986/87 and an increase in expenditure of £87, 000 which was partly due to the development of the new catheterisation laboratory. [129]
92 In September 1985 Mr Antony Hurst (then Administrative Secretary to the SRSAG) wrote to Miss Catherine Hawkins [130] indicating that the SRSAG had given some preliminary thought to the recommendations it might make to ministers on allocations for 1986/87.
93 On 17 October 1985 Dr Martin Reynolds (Chief Medical Advisor/Assistant General Manager, SWRHA) responded to Mr Hurst objecting to the proposed methodology for the allocation of funds for 1986/87. [131]
94 On 1 November Mr Hurst replied indicating that he had put Dr Reynold's objections to the SRSAG at their meeting on 23 October, along with similar objections, which were received from the West Midlands:
`The Advisory Group considered these objections carefully, and looked in some detail at its proposal methodology and at the implications for the individual centres. It fully appreciated that the methodology was somewhat rough and ready, but decided that it was the best that could be devised in the circumstances ...' [132]
95 Dr Reynolds had asked Mr Hurst to supply details of the calculations used by the SRSAG. On 11 December 1985 Mr Hurst replied drawing attention to a document sent, in confidence, to regional general managers in late November. [133]
96 When the financial allocations for 1986/87 were announced in January 1986, [134] it was also announced that ministers had decided that capital funding should be brought within the arrangements for supra regional funding from 1 April 1987. Regional health authorities seeking capital allocations for 1987/88 were to submit any application by 15 June 1986. [135]
97 As with revenue funding, the sums to be allocated to supra regional services for capital funding had to be found from within the total resources available nationally for allocation to health authorities. Proposals for capital funding for supra regional services were to be referred to the SRSAG. Regions were advised by the DHSS about schemes that might be approved for funding:
`1. New development, or expansion, of a unit to enable a greater quantity of service to be provided, will be funded through a central pre-emption on health authority capital. Such schemes will be subject to Advisory Group scrutiny of the level of increased service planned.
`2. Replacement and/or upgrading of existing capital stock without any increase in the number of patients treated and developments which mainly consist of replacement or upgrading, will be funded in part by the host region, pro-rata to the use made of the unit by its own residents (averaged over the preceding three years) and the remainder by central pre-emption on health authority capital.' [136]
98 The protected revenue funds for Bristol for 1986/87 were £326, 000. In addition, £15, 000 `additional central pre-emption' was added, making a total of £341, 000. `Pre-emption' meant that this sum of money was anticipated as being available from the following year's financial allocations. Bristol's allocation of funds was the lowest of the nine centres, the next lowest being Newcastle with a total allocation of £693, 000. The reason for the reduction in the amount allocated was directly related to the return made by Bristol to the SRSAG. [137] Fewer patients (137) had received inpatient treatment in 1984/85 than had been anticipated (247). [138]
99 In February 1987, [139] the Secretary of State announced his decision for the 1987/88 funding. He stated that the `protected funding level' for Bristol was to be £357, 000, and that the `additional central pre-emption' was £135, 000. This made a total of £492, 000. The `additional central pre-emption' was significantly larger than any granted to the other centres. The overall allocation to Bristol was such that, of all centres, it ranked second lowest, the lowest being Harefield. [140]
100 The announcement also indicated that: `The Advisory Group envisaged that there would be little need for expansion in the total service'. [141]
101 1987/88 was the first year in which the SRSAG considered applications for capital allocations. Two centres carrying out NICS applied for capital funding. They were Liverpool (which applied for £89, 000) and Bristol (which bid for £265, 000). [142]
102 The SRSAG gave priority in capital allocation: `... to those Supra Regional Services and those Supra Regional Centres where an expansion of workload is envisaged during 1987/88 and beyond.' [143]
103 On 13 November 1987, the DHSS wrote to Catherine Hawkins indicating that the application for capital funding for extending the areas for wards and for operating theatres in the BRI had not been recommended for funding. [144]
104 Mr Nix wrote in a memorandum of 3 December 1987 to Mr Boardman:
`The bid to the DHSS was a combined effort between myself and the Regional Treasurer in an attempt to obtain funding to offset the capital injected by the Regional Health Authority into the developments at the BRI and the Childrens Hospital for cardiac services. The fact that we have not received any funding does not effect [sic] this District, it just means that the RHA has had to foot the full capital bill.' [145]
105 The total supra regional allocation of funds to Bristol for NICS for 1988/89 was £573, 000, including an additional central pre-emption of £59, 000. [146]
106 The SRSAG asked the SWRHA to provide a short report on the funding allocated to NICS in Bristol. On 19 August 1988, Catherine Hawkins wrote to Dr Roylance asking him to provide a brief account of the benefits obtained from the expenditure of supra regional funding and confirmation that increases in workload proposed for 1988/89 would be achieved as a result of the allocation of the funds. [147]
107 The funding allocation for 1989/90 was announced in December 1988. Bristol was allocated a total of £602, 000. [148]
108 The allocation for 1990/91, announced on 3 January 1990, gave Bristol a total of £689, 000.
109 The NHS reforms planned to take effect in April 1991 meant that the SRSAG would act as the `purchaser' of the services for NICS from that date. [149] The process of contracting is set out later in this chapter.
110 In 1992, Bristol made a second bid for SRS capital funding, this time in the amount of £300, 000. The money was to enable them to locate all paediatric cardiac surgical services on one site. [150] The projected total cost was £550, 000. The proposal was that the remainder of the cost would be met by the UBHT. A paper, dated April 1992, prepared by the Secretariat of the SRSAG stated:
`The proposal submitted was only a draft outline requiring further discussion and planning. Until a firm proposal and a justified business case is received members are invited to defer this request.' [151]
111 Mr Nix told the Inquiry that he had not been aware that this bid had been submitted to the SRSAG until it was drawn to his attention by the Inquiry. [152] The bid appears to have been submitted by Dr Joffe. [153] Mr Nix went on to say that he had written a paper, setting out what work would be necessary to make a submission, dated 9 June 1992. [154] Thereafter, an `outline submission' or `interim statement' had been submitted about two weeks later in a document sent under cover of a `with compliments' slip from Dr Joffe. The bid, Mr Nix went on, was clearly `not extensive in its content'. [155]
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Footnotes
[116] UBHT 0278 0611. The sum was also discounted when assessing the region's distance from its RAWP target. In addition to `protecting' the amount of money already being spent, the SRSAG was also authorised to recommend that an additional sum (`new money') be pre-empted from the NHS allocation to enable the service to be expanded. This sum would be added to the RHA's allocation to be made available to the district for expenditure on the service. Such `additional' sums were normally made on a recurring basis and were also discounted when assessing the RHA's distance from its RAWP target
[117] This system included NICS from the financial year 1986/87: UBHT 0278 0611 - 0612
[118] In April 1984 the DoH wrote to the Regional Administrator at the SWRHA requesting up-to-date information on activity and costs for the purposes of this study. The SWRHA Regional Administrator in turn wrote to the relevant local administrators to obtain the relevant information: UBHT 0278 0593
[119] Administrative Secretary to the SRSAG 1987-1992
[120] WIT 0034 0002 - 0003 Mr Angilley
[121] UBHT 0278 0573; letter from Mr Hucklesbury to Mr McCelland dated 25 May 1984
[122] UBHT 0278 0573; letter from Mr Hucklesbury to Mr McCelland dated 25 May 1984
[123] UBHT 0278 0564 - 0566 ; letter from Mr Hurst dated 28 January 1985
[124] ES 0002 0006; meeting on 5 December 1984
[125] ES 0002 0009; minutes of meeting of representatives of the designated supra regional centres, 5 December 1984
[126] UBHT 0278 0609; RGM (85)9
[127] UBHT 0278 0519; letter dated 11 March 1985
[128] UBHT 0278 0509; letter from Dr Baker to Mr Churchill at SWRHA dated 5 August 1985
[129] Figure shown at UBHT 0278 0507 - 0508 ; Schedules
[130] UBHT 0278 0504; letter dated 26 September 1985
[131] UBHT 0278 0497; letter from Dr Reynolds to Mr Hurst dated 17 October 1985
[132] UBHT 0278 0500; letter from Mr Hurst to Dr Reynolds dated 1 November 198
[133] UBHT 0278 0493; letter from Mr Hurst to Dr Reynolds dated 11 December 1985
[134] UBHT 0278 0474; letter from Mr Hurst to General Managers dated 16 January 1986; and UBHT 0278 0492; `Supra Regional Services,
1986-87'
[135] UBHT 0278 0474 - 0483 ; letter from Mr Hurst to General Managers dated 16 January 1986; and UBHT 0278 0492; `Supra Regional Services, 1986-87'
[136] UBHT 0278 0483 `Supra Regional Services, 1986-87'
[137] UBHT 0278 0477 `Supra Regional Services, 1986-87'
[139] UBHT 0278 0410 DHSS press release
[140] UBHT 0278 0416; Harefield Hospital was thereafter to plan and perform its work in conjunction with the Brompton Hospital
[141] UBHT 0278 0417 DHSS press release
[142] For further details see Chapter 7
[143] UBHT 0278 0421 DHSS press release
[144] UBHT 0278 0279; letter from S Hiller, DHSS, to Miss Hawkins dated 13 November 1987
[145] UBHT 0278 0258; letter from Mr Nix to Mr Boardman dated 3 December 1987
[146] UBHT 0062 0430; letter from Mrs Clark to Dr Freeman dated 24 March 1988
[147] UBHT 0278 0177; letter from Miss Hawkins to Dr Roylance dated 19 August 1988
[148] UBHT 0278 0154 - 0156 DoH press release dated 29 December 1988
[149] UBHT 0064 0090 - 0091 `Supra Regional Services 1991-92'
[150] DOH 0002 0141; SRS(92)12
[151] DOH 0002 0148; SRS(92)12
[154] This date is after the decision had been made to defer a request for funding pending a `firm proposal and a justified [business] case'. T23 p.35 Mr Nix