Covid-19 Coronavirus

New Funding Arrangements

Project Lead: Bevan Boyle and Anup Rughani

Project Manager: Anne Cecile Danger


The aim of this project is to achieve a health and care system that plans for the future, is affordable, financially sustainable, and delivered to an agreed set of standards, contracts and mandate through six strands of work. The development of the funding model for the Nursing and Residential Care work is also being delivered by this project in conjunction with the Care Pathways and Service Delivery project.


Recommendation 17: Increased funding should be linked to the achievement of annual efficiency targets (Strand 1: System wide Efficiencies)  

The project has established an agreed 8 year efficiency profile to being costs to what they 'should be' and that has been embedded to be reviewed annually as part of the budget setting process. Therefore this is complete.

Recommendation 19: Increases in funding for health and care services will be required to support the increased demands that will be placed on those services due to demographic changes, non-demographic changes and inflation (Strand 2: New Funding Formula)

The project has completed modelling that enabled Treasury and DHSC to agree a funding formula that reflects growth in activity and due to demographic factors as well as the differential between health CPI and standard CPI, plus Treasury will take a view on an annual basis of an appropriate allocation for standard CPI.  Therefore this is complete.

Recommendation 20: Funding, based on agreed need, should, over time, move from the current annual budget allocation to a 3-5 years financial settlement for heath and care services for the Island (Strand 3: System Funding Model)

The agreed funding formula and efficiency target together give the DHSC and Manx Care an understanding of the funding that will be provided.  In addition, DHSC now have an additional contingency fund in order to manage the natural unpredictability of health and care provision.  In addition, there is an existing provision in place for DHSC and Manx Care to carry forward unspent funds between years with Treasury approval.  All of these factors combined mean that the recommendation is delivered as far as it can be in the current democratic system given that Tynwald have to vote on the budget annually.  However, in addition we have also put forward proposals about additional means for multi-year financial planning for the DHSC to consider taking forward.  Therefore this is complete.

Strand 4: Activity Based Costing

Through the system financial model, this work strand will develop activity based costing across the health and care system to support the ongoing transformation across all projects within the Health and Care Transformation Programme and ongoing benchmarking to help Manx Care and DHSC.  Activity-based costing compares the cost for each activity within the health and care system with its actual consumption.

Strand 5: Management Information

There are two elements to increasing transparency in costs and wider management information. This first part covers management information across the system, including both financial and non-financial information, as well as internal and external reporting requirements. This work strand will recommend a reporting framework to outline flows of management information across the health and care system. This will include a high level overview of the structure and contents of reporting at various levels.

Recommendation 16: The provision of social care should be considered as part of the current review of future funding of nursing and residential care with the intention of removing disincentives to people requiring care and support remaining in their home. This consideration should specifically include equalisation of the current threshold of financial assistance, a more flexible approach to funding to enable joint commissioning of broader care arrangements in the interests of the service user and provision of 24/7 social care access.  (Strand 6: Nursing and Residential)

The project has completed the modelling required to understand the cost of introducing each of the cost models for nursing and residential care plus the cost of introducing free home care and will complete further modelling as required during the course of the nursing and residential care work. 

Aims for the next 12 months

Strand 1: System wide Efficiencies

  • High-level review of the incentives and disincentives within GP contracting and Social Care benefits system – Complete
  • Summary report outlining modelling outputs and assessment of 3-5 options to close funding gap – Complete

Strand 2: New Funding Formula

  • Complete high-level business case for preferred funding formula – Complete

Strand 3: System Funding Model

  • Formal hand over of system model – Complete

Strand 4: Activity Based Costing

  • Summary report outlining proposed framework and roadmap for development of a long term systematic approach to activity-based costing for acute and non-acute settings – Ongoing

Strand 5: Management Information

  • Summary report outlining proposed framework for management information – Ongoing

Strand 6: Nursing and Residential

  • Detailed modelling, analysis, and option recommendations around home, nursing and residential care – Ongoing


Linked recommendation: 16 17 19 20 

Back to top