24 April 1985

Dear Sir

COMMUNITY CARE: JOINT PLANNING AND SUPPORT FINANCE

INTRODUCTION

SUMMARY

1. The circular summarises the Secretary of State’s conclusions following a review of the first 5 years’ operation of the Joint Planning and Support Finance scheme, and his consideration of comments received in the course of consulting interested organisations. It re-affirms his objective of promoting closer collaboration between health boards, local authorities, voluntary agencies and other organisations; extends the scope of the support finance scheme to include payments in respect of housing and education as well as social work; and makes various changes to the terms on which support finance may be made available. The new support finance arrangements will come into operation on 1 May 1985.

PREVIOUS GUIDANCE

2. The joint NHS Circular No 1980(GEN)5 and SW Circular No 2/1980 of 14 March 1980, which is hereby withdrawn, outlined joint planning and support finance arrangements whereby NHS financial resources could be made available to local authorities and voluntary organisations for the development of community care. The circular explained that the arrangements would be experimental; that they would be reviewed in the light of experience; and that - pending such a review - support finance would be confined to social work projects.

CONTINUED RELEVANCE OF CIRCULAR

3. Whle the circular continues to provide the basis for the provision of joint or support finance much of its contents has been overtaken by subsequent guidance, such as:

7 January 1991: Community Care Planning (SWSG1/91 and SHHD/ DGM(1991)1).

September 1992: Joint Purchasing Resource Transfer and Contracting (MEL(1992)55)

May 1993: Bridging Finance Scheme (MEL(1993)67 and ENV 12/93)

December 1993: Priorities and Planning Guidance (MEL(1993)155)

March 1994: Continuing Care of the Frail Elderly (letter to Directors of Social Work and Health Board General Managers)

August 1994: Community Care: The Housing Dimension (SWSG7/95, NHS MEL(1994)79, ENV 27/94)

November 1994: Community Care Planning (SWSG14/1994)

The Scottish Office is in the course of revising the guidance on resource transfer (MEL(1992)55) and will consider the continued relevance of SWSG5/95 in that light.

INTRODUCTION

4. It is generally accepted that a significant proportion of long stay hospital patients would be more appropriately cared for by other forms of NHS provision, for example, continuing care units; or in hostels, group homes and other residential facilities provided by local authorities and voluntary organisations; or with suitable support in their own homes (which might be special needs accommodation provided by local authorities or housing associations). At the same time, there are people being cared for in local authority accommodation, or in their own homes, whose emergency needs would be more appropriately met by the NHS. The Secretary of State believes that there is a need to develop more flexible patterns of care, emphasising the expansion of non-institutional services within the community, as a means of improving the quality of life for those concerned.

JOINT PLANNING

5. Close co-operation in planning is essential if the resources of health boards, local authorities and other agencies are to be used effectively in the provision of an appropriate range of services for client groups such as the elderly, the mentally ill, and the mentally and physically handicapped (including the young chronic sick). Health boards and local authorities already have a statutory responsibility, in terms of section 13 of the National Health Service (Scotland) Act 1978, to co-operate with one another in order to secure and advance the health of the people of Scotland. In most areas the framework for such co-operation already exists in the joint liaison committee structure established following the 1977 report of the Working Party on Relationships between Local Authorities and Health Boards. In practice, however, co-operation between health boards and local authorities, and the joint liaison committee arrangements, have not been uniformly successful.

6. The Secretary of State therefore re-emphasises the importance of effective co-operation. He asks that health boards and regional, islands and district councils should collaborate, through joint liaison committees (the structure and operation of which should be reviewed for the purpose), in preparing joint plans for the provision of services for the priority categories identified in the report ‘Scottish Health Authorities Priorities for the Eighties’; that is, the elderly, the mentally ill, and the mentally and physically handicapped (including the young chronic sick). He suggests that these plans should -

6.1 assess the need for the provision of those services in their areas;

6.2 set out the main objectives to be achieved in the next 10 years;

6.3 take account of the resources available, and of the recommendations made in the relevant reports of the Scottish Health Service Planning Council and the former Advisory Council on Social Work;

6.4 quantify the effects of those objectives on expenditure, hospital beds, health and local authority service provision, etc.

7. These plans would in the first instance be for the guidance of the health board and the local authorities concerned; they need not be formally submitted to the Secretary of State, and will not require his approval, although it would be helpful if copies were sent to him. The Secretary of State asks that the first round of plans should be drawn up not later than the end of March 1986, and that they should be kept under continuing review thereafter.

8. The Secretary of State thinks it important to ensure that joint planning is seen to be effective in the interests of the client groups which it is designed to serve. Though meetings of health boards are required to be public whereas those of their committees are not, he has concluded that in order to express the public accountability of health boards and local authorities in such collaboration, the meetings of joint liaison committees should be open to press and public. Papers relating to meetings of the committees should be made available to all organisations which ask for them.

FINANCIAL ARRANGEMENTS

9. The Secretary of State recognises that financial arrangements are an important - though by no means the only - factor in successful local co-operation. Some forms of community care will continue to be financed from a single source. For others, either joint finance or support finance arrangements will be appropriate.

JOINT FINANCE

10. Joint financing is appropriate when a health board and a local authority as education, social work or housing authority have a long term operational commitment to a jointly managed project providing services which both have a statutory power to promote, or embodying elements for which each is separately responsible. The Secretary of State asks health boards and local authorities to give careful consideration to the scope for such collaboration.

11. The terms on which NHS and local authority finance may be used for jointly planned and managed projects will remain a matter for decision by individual health boards and local authorities (subject to the normal arrangements for meeting NHS and local authority capital expenditure). In particular, the limitations on the use of NHS finance set out in paragraphs 21-25 of this circular do not apply.

SUPPORT FINANCE

12. Support finance is appropriate for projects which provide services which are the statutory responsibility of local authorities, but which have been identified in joint planning arrangements as being likely to make a significant and cost-effective contribution to the discharge of a health board’s responsibilities.

13. The present arrangements for the support finance scheme enable health boards to apply to SHHD for allocations from centrally-reserved NHS finance to meet part of the capital or revenue expenditure incurred by social work departments. The results have been sufficiently encouraging to confirm the Secretary of State’s view of the importance of such co-ordinated planning and financing of community projects, and he has therefore decided to extend the scope for health boards to assist local authorities in providing appropriate forms of community care.

14. In terms of section 16A of the National Health Service (Scotland) Act 1978, as inserted by section 2 of the Health and Social Services and Social Security Adjudications Act 1983, he hereby determines that, as from 1 May 1985:

14.1 Responsibility for the operation of the support finance scheme, so far as new projects are concerned, will be devolved to health boards; the previous arrangements for the central allocation of support finance will be discontinued, except in the case of projects which have already been approved by the Department; and after provision has been made for such projects the balance of the previous central reserve will be distributed to health boards as part of their financial allocations;

14.2 So far as new projects are concerned, the terms of the support finance scheme will be extended as follows:

- the proportion of capital and revenue costs which may be met by support finance, and the length of time for which revenue support may be offered, will be greater than at present;

- support finance may also be made available to meet the cost of relevant housing and education projects;

- voluntary organisations will have direct access to health boards to negotiate for support finance.

These revised terms are described in more detail in the rest of this circular, together with guidance on the use of support finance.

TRANSITIONAL ARRANGEMENTS

15. SHHD announced on 19 December 1984 that it was not prepared to accept further applications for centrally earmarked support finance. It will however continue to maintain a central reserve for as long as necessary in order to reimburse health boards for their expenditure on projects which were approved under the previous arrangements. All such payments will be within the terms of the original offers.

CENTRAL GOVERNMENT FINANCE

16. The uncommitted balance of the funds which would previously have been retained by SHHD for support finance purposes will be revalued and distributed to health boards in proportion to their baseline levels of revenue expenditure on hospital and community health services, prior to the distribution of growth monies under SHARE. Health boards will in future be expected to meet all support finance payments, whether capital or revenue, towards the cost of projects which they wish to assist but which have not already been approved by SHHD under the previous arrangements, from within their normal financial allocations.

INDICATIVE LEVELS OF EXPENDITURE

17. Each year, SHHD will indicate how much it expects each health board to commit to support finance purposes. This indicative level of expenditure will be based on the population of the board’s area, weighted to account for those in need of long term care. Each health board’s indicative level of expenditure will be regularly reviewed to allow not only for inflation but also - in the light of experience - for further growth in expenditure on support finance.

18. These sums should not be regarded as either maximum or minimum levels of expenditure; in particular, health boards will if they wish be able to give additional financial support, provided that all payments comply with the conditions set out in this circular. Unplanned shortfalls of expenditure on support finance arising towards the end of the financial year may be carried forward under the normal arrangements applying to health boards and to local authority capital expenditure.

CHOICE OF PROJECTS

19. Health boards will normally have complete discretion in their choice of projects to benefit from support finance. However, they must satisfy themselves, taking account of the recommendations of joint liaison committees, that transferred resources will be used to good effect. Since the resources available to boards are voted to health purposes, they should support community projects only where these are likely to make a significant contribution to health care and the development of the strategic planning priorities of the area, as determined in accordance with the procedures set out in paragraph 6 of this circular. Moreover, health boards must be generally satisfied that the proposed expenditure would be more beneficial in terms of total care than an equivalent amount spent on health services for the community. Support finance should only be used where it would enable such a project to proceed earlier than might otherwise be possible or, exceptionally, prevent its premature conclusion. Wherever these criteria are met, support finance would be a legitimate, indeed preferential, use of NHS resources.

20. Without wishing to place formal restrictions on this discretion, the Secretary of State is nevertheless concerned that whenever possible NHS resources used for jointly-planned community facilities should benefit those client groups to which the SHAPE report gave priority. Health boards should also give preference to non-institutional forms of care. Examples of such services include special needs accommodation for the elderly and disabled, hostels and group homes for the mentally ill and mentally handicapped, day centres, community alarm systems, home helps, and any other scheme which provides support for dependent people and their families by enabling them to return to, or remain in, the community with reasonable confidence and security.

CAPITAL PROJECTS

21. Health boards may, as now, use support finance to help meet the capital costs of local authority projects. They will be responsible, following an appropriate scrutiny and appraisal of the available options, for deciding which projects they will support, and the proportion of project cost to be met by NHS finance. In exceptional circumstances, eligible capital projects may be wholly funded by health boards, but grants should not normally exceed two-thirds of the total cost.

22. The health board contribution should be determined in financial (not percentage) terms, and should be agreed before contracts for construction work are let. Health boards and local authorities should keep in close consultation throughout the planning and construction of capital projects in order than any fluctuations or variations in costs may be identified promptly and early agreement reached on how such variations should be handled. Any excess costs will in the first instance be a matter for the local authority; the health board should not consider itself under obligation to contribute to such excess costs, and any additional payments should be understood to be entirely at the board’s discretion. Regardless of the level of support given by the health board, the responsibility for developing and managing the project will rest with the local authority.

23. Local authorities are not generally required to obtain specific approval for individual projects, but should include in their annual Financial Plans details of any proposed support finance projects including the contributions expected from health boards. Local authority contributions towards the cost of such projects should be accommodated within the block consents issued to them under section 94 of the Local Government (Scotland) Act 1973. However, so far as health board payments are concerned, an additional standing section 94 consent, equal to the amount received in the appropriate year, will be included in the annual consent letter.

REVENUE SUPPORT

24. Health boards may continue to use support finance to contribute to the revenue costs of any local authority projects to which they make a capital contribution, though making a capital contribution creates no obligation to support the revenue costs of such projects. They may also continue to use support finance to contribute to the revenue costs of such projects, for which the local authority has met the total capital cost, as well as the revenue cost of projects which do not involve capital expenditure.

25. Health boards may meet up to 100% of the revenue cost of eligible projects for up to 3 years. Thereafter, the proportion of project cost met by support finance should taper off so that the funds available may be redeployed to other projects; the pattern of tapering is for the health board to determine, in consultation with the local authority. Payments should not normally be made for more than 7 years in all. Exceptionally, support may be extended for a maximum of 2 further years; SHHD should be informed of all instances of this kind.

TRANSFERS FROM HOSPITAL TO COMMUNITY CARE

26. Health boards may make lump sum or continuing payments to a local authority to help meet the cost of projects which make it possible for people to move out of hospital into more appropriate forms of care in the community. In each case, the health board and the local authority must be satisfied that the move to an alternative form of care would benefit those concerned, and that the arrangements would be cost-effective. In such circumstances, not only the choice of project, but also the proportion of project cost and the length of time for which payments may be made will be at the discretion of individual health boards. In assessing an appropriate level of NHS contribution to the cost of such transfers, full account should be taken of an individual’s eligibility for social security benefit.

27. As vacancies arise in facilities supported in this way, they may be filled either by other people moving out of hospital, or by individuals for whom there would otherwise be no alternative but less appropriate admission to hospital.

28. Scottish Office Departments will monitor such transfers from hospital to community care (see paragraph 37) and in due course will consider with health boards and COSLA whether, and to what extent, the continuing costs of sustaining such community facilities might properly be recognised by a permanent transfer of resources between the health and local authority services.

ACQUISITION AND USE OF LAND AND PREMISES

29. Health boards should consider the possibility that NHS property which is surplus to their requirements might be suitable for local authority projects which have been identified as part of wider joint planning. The arrangements by which support finance may be used to lease or purchase land and premises, which have now been extended to include property vested in the Secretary of State for NHS purposes, are described in Annex A to this circular.

HOUSING

30. Health boards may use support finance to contribute to the cost of projects initiated by district and islands councils as housing authorities in meeting the capital and running costs of accommodation built, acquired or adapted to meet the special needs of the elderly or disabled. New town development corporations, the Scottish Special Housing Association, the Housing Corporation and registered housing associations, insofar as they provide such accommodation may also benefit from support finance on the same terms as district and islands councils. The arrangements are described in Annex B to this circular.

EDUCATION

31. Health boards may also contribute to the cost of projects initiated by regional or islands councils as education authorities in providing for special educational needs within school education, and corresponding provision in further education. Such assistance should be limited, in the case of school education, to provision made by an education authority for children and young persons recorded by them as having special educational needs in terms of the Education (Scotland) Act 1980 as amended. In the case of further education, the use of support finance should be limited to the provision of facilities for those who by reason of their age, illness or disability are unable to benefit from the facilities generally provided in the community.

VOLUNTARY ORGANISATIONS

32. The Secretary of State is concerned to encourage the significant contribution which voluntary organisations make to the provision of community care. All of the arrangements outlined in this circular therefore apply to voluntary organisations insofar as they provide social work, housing or educational services similar to those provided by local authorities. In particular, it will now be open to voluntary organisations to put proposals for financial support for projects for which they will be solely responsible direct to health boards (and vice versa) without, as previously, the prior agreement and sponsorship of the local authority concerned. However, when submitting a proposal to a health board a voluntary organisation should confirm that it has notified the local authority concerned.

33. It is intended that there should be full discussion and co-operation between health boards, local authorities and voluntary organisations in the development of projects by the voluntary sector. This should desirably be through the medium of joint liaison committees. Voluntary organisations should be invited to take part in the deliberations of joint liaison committees whenever matters of interest to them are on the agenda, including the preparation of the joint plans referred to in paragraph 6.

34. The terms and conditions under which financial and other assistance may be provided by health boards to voluntary organisations in terms of sections 16(1) and 16B of the National Health Service (Scotland) Act 1978 are quite distinct from the terms of the support finance scheme, and are not affected by this circular. Payments by a health board under section 16B will not count against its indicative level of expenditure for support finance purposes.

LOCAL AUTHORITY RELEVANT EXPENDITURE

35. For the purpose of determining relevant expenditure, and for rate support grant and guideline purposes, local authority expenditure is calculated net of income from sources other than Exchequer grant. That part of local authority expenditure which is met by support finance will not increase their expenditure in total, nor the expenditure of individual authorities for purposes of comparison with current expenditure guidelines. Total public expenditure will not be affected, because the contributions from health boards will be a charge on the expenditure provision made for the Health programme. Local authority revenue contributions to projects using support finance, both during the period of such and thereafter, must normally be met from within the current expenditure guidelines of the authorities concerned. However, in recognition of the importance of joint planning the Secretary of State will disregard for RSG abatement purposes the sum of any increases in local authority contributions to individual projects to which health boards contribute in 1985/86, as compared with 1984/85. Full advice on this disregard will be given in authorities’ provisional and final out-turn forms for 1985/86.

MANPOWER STATISTICS

36. In preparing their statements of manpower information in accordance with the Code of Practice published with SDD Circular 21/1981, local authorities should draw attention to the number of staff, expressed if possible in full time equivalents, whose costs are met by payments from health boards. Arrangements have been made to have a suitable qualification made to the national joint manpower watch statements.

ACCOUNTABILITY

37. For each project accepted for support finance, the health board should prepare in agreement with the local authority, voluntary agency or other organisation concerned a memorandum specifying:

37.1 the facilities or services for which the support finance payments are to be used;

37.2 the estimated cost of those facilities or services and the expenditure to be met by the health board;

37.3 the duration of the support finance payments;

37.4 the expected pattern of NHS financial support, taking account of changes in pay and prices over time;

37.5 the timing of support finance payments.

An outline of such a memorandum of agreement is at Annex C to this circular. Copies of memoranda which relate to projects for moving patients and resources from hospital to community care should be sent to Mr C Naldrett, NHS Management Executive, Directorate of Finance, Scottish Home and Health Department, St Andrew’s House, Edinburgh EH1 3DE.

38. Agreements may be reviewed annually at the instigation of either party, but should normally only be charged with the agreement of both parties. This imposes an important obligation on health boards and local authorities to ensure that they do not over-commit their expected future resources when entering into financial arrangements of this kind.

39. The health board should also require the local authority, voluntary agency or other organisation concerned to provide an annual voucher in the form specified in Annex D to this circular, itemising the actual expenditure and certifying that the conditions originally attached to the payments have been fully met, or indicating such variations as have since been agreed with the health board. In the case of a voluntary organisation, the health board should require such a voucher to be provided only if its total support finance payments to that organisation exceed £10,000 in any one year.

MONITORING AND REVIEW

40. Some of the comments received in the course of consultation suggested that, in order to ensure the effective development of community care, both the joint planning arrangements and the operation of the support finance scheme should be brought more directly under Ministerial control. The Secretary of State’s present view is that this would be inconsistent with is wider objective of continuing to delegate to health boards as much responsibility as possible for planning and delivering their services, in the context of national guidelines. Similar considerations apply, within the different constitutional framework, to local authorities.

41. Departments will however keep under review the nature and extent of joint planning, and the development of community services, including the use of support finance. These will be factors to which they will pay particular regard, for example, in monitoring the progress made by individual health boards in implementing the recommendations of the SHAPE report. The arrangements outlined in this circular may be revised in the light of experience.

CONTACT

42. Separate copies of this circular have been sent to Director of Social Work, the Director of Education and the Director of Housing. Copies have also been sent to other organisations providing care in the community. Enquiries should be addressed to -

42.1 Health: Mr C S Naldrett, NHS Management Executive, Directorate of Finance, St Andrew’s House, Edinburgh EH1 3DE

(0131-224-2363).

42.2 Social Work: Mrs L Malcolm, Social Work Services Group, Room 48c, James Craig Walk, Edinburgh EH1 3BA (0131 244 5424).

42.3 Housing: Mr A W Wallace, Housing Group, St Andrew’s House, Edinburgh EH1 3DD (0131-244-2536).

42.4 Education: Mr S Macleod, Scottish Education Department, Victoria Quay, Edinburgh (0131-244-5426)

Yours faithfully

B C S Slater, SHHD

D A Bennet, SWSG

Miss M Tait, SDD

E C Davison, SED

ANNEX B to

Circular Nos: NHS 1985(GEN)18

SW 5/1985

SDD 15/1985

SED 1127/1985

HOUSING

1. Support finance can already be used to meet certain costs incurred by social work authorities, housing associations and other voluntary organisations in providing accommodation to meet the special needs of the elderly or disabled. NHS financial assistance can now also be given towards the capital, maintenance and management costs of housing provided by the local authorities and other organisations referred to in paragraph 29 of this circular. The use of NHS finance would be particularly appropriate if it would enable the elderly or disabled to leave, or prevent them from being admitted to, long-stay hospital care, thus easing the demand for hospital beds.

2. The extension of health boards’ powers so that they may use support finance to assist the provision of housing not only by local authorities but also by a wide range of other organisations which have the power to provide housing is intended to encourage wider and more effective collaboration in the development of community care. Health boards, social work and housing authorities, and the appropriate voluntary organisations, should consider together how the available resources, including support finance, can best be used to provide the optimum balance of care to meet the assessed needs of the elderly and disabled in their area. Until now housing authorities, housing associations and voluntary organisations providing hostels or houses have not necessarily been involved in the work of joint liaison committees. It is suggested that in future they should be represented, whenever appropriate, at the meetings of such committees and their officer level working groups. The Housing Corporations should be involved in the planning stage of all projects involving housing associations.

3. Local authorities and other organistions providing housing can already receive grants, subsidies and loans for acquiring and maintaining property. NHS resources should not normally be used to maintain existing accommodation or to replace established sources of finance. In general support finance should only be used to help provide additional facilities for the elderly or disabled by developing new or extending existing accommodation.

4. In collaborating with housing agencies, health boards can make a special contribution to assessing needs; providing advisory services; encouraging imaginative schemes by (for example) financing key support staff; and by helping to ensure that former hospital patients moving back to the community are adequately prepared and supported during the setting-in period. A particularly effective way of enabling the elderly or disabled to remain in their own homes is to provide special aids or structural adaptations. Under the existing support finance arrangements, health boards may meet part of their cost of providing aids, equipment and adaptations for which social work authorities are responsible under the Chronically Sick and Disabled Persons Act 1970 as extended to Scotland by the Chronically Sick and Disabled Persons (Scotland) Act 1972. Section 3 of the 1970 Act emphasises that housing authorities should have regard to the special needs of the disabled in discharging their duty under Section 137 of the Housing (Scotland) Act 1966 to consider the housing conditions and needs of their districts. The extension of the support finance scheme makes it possible for health boards to help meet the cost of structural alterations to property owned or managed by housing authorities.

5. In making support finance available to local authorities and housing associations, health boards should bear in mind the following points:-

a. special needs accommodation for the elderly or disabled may not be eligible for housing grant or subsidy if the level of care exceeds that normally considered appropriate for housing schemes; for example, under present arrangements a project will not qualify for any housing association grant (HAG) if there is more than about one member of caring staff for every 2½ residents;

b. in assessing an appropriate level of revenue support, health boards should take full account of any social security and housing benefits for which residents may be eligible.

6. Local authorities, housing associations and other organisations receiving support finance should bear in mind the following points:-

a. Capital projects should conform to the same standards and, if appropriate, cost ceilings and scheme-work procedures which would apply if they were being developed without NHS financial support;

b. From the financial year 1985-86 local authority housing capital allocations will automatically be enhanced by the amount of the capital contributions received during the year from health boards. Any entitlement to subsidy of local authorities receiving such capital contributions will not be affected. However a health board should not meet loan charges incurred by a local authority in providing special needs accommodation if that authority is in receipt of housing subsidy, as this could give rise to a corresponding reduction in the subsidy;

c. Capital expenditure incurred by housing associations is already eligible for HAG under the provisions of the 1974 and 1980 Housing Acts. Support finance may either be used to meet capital expenditure which is not in principle eligible for HAG or expenditure which could in principle have been eligible for HAG but which cannot proceed at a particular time because of the lack of housing finance. It is not however intended that support finance should normally be used to meet capital expenditure which could be met in other ways, and such assistance should not be considered until all other sources of finance have been fully explored. If a project has been approved for HAG, the expenditure qualifying for grant will exclude that which will be met by support finance;

d. The use of support finance to meet additional management or maintenance costs incurred by a local authority will not affect that authority’s entitlement to housing subsidy;

e. Deficits incurred by housing associations in managing housing or hostel accommodation, but not the cost of providing care, are eligible for hostel or revenue deficit grant, as appropriate. If a housing association obtains NHS finance to meet revenues expenditure other than the cost of providing care, that expenditure should be clearly identified and appropriate accounting arrangements made not only to avoid double subsidy but also to ensure that costs relating to the provision of care are correctly charged;

f. The effect on expenditure on special needs housing accommodation provided by new town development corporations and the SSHA is essentially the same as for local authorities, so far as both their subsidy entitlement and their capital allocations are concerned.

ANNEX A to

Circular Nos. NHS 1985(GEN)18

SW 5/1985

SDD 15/1985

SED 1127/1985

USE OF SUPPORT FINANCE TO ACQUIRE LAND AND PREMISES

Lease of Sale or NHS Land and Premises

1. SHHD’s "Dear Secretary" letter DS984)18 of 30 March 1984 asked health boards to review their holdings of land and premises vested in the Secretary of State for NHS purposes and to identify that which was surplus to their needs. Such property should normally be sold on the open market for the highest possible price, but may sometimes be suitable for the development of services provided by local authorities and other organisations which contribute to the discharge of health boards’ statutory responsibilities. Health boards should therefore bear in mind the possible advantages of making surplus property available for projects identified as part of wider joint planning arrangements, and with effect from the date of this circular health boards are able to apply support finance to the disposal of such property in accordance with the procedures set out in this Annex.

2. As explained in "Dear Secretary" letter DS(84)18, health boards are now responsible for arranging for the sale of property valued at less than a delegated limit, at present set at £100,000. Sales expected to realise more than £100,000 are conducted directly be SHHD. In either case, the first £100,000 obtained from a sale is made over to the health board. A health board, acting within its delegated powers, may give priority to a local authority or other health-related interest in selling surplus NHS property. All such sales shall be at a price determined by the District Valuer, and subject to such other terms and conditions as may be agreed between the two parties. SHHD may similarly sell NHS property of greater value to a health-related interest of a board.

3. Health boards may also, with the approval of SHHD:-

a. grant a lease to a health-related interest on payment of a capitalised rent (a grassum);

b. alternatively, if a capitalised rent as in (a) is not appropriate, the rental payable may be assessed in accordance with the normal arrangements for leasing NHS property.

The services of the District Valuer must be used to assess such capitalised and other rentals.

4. In the circumstances set out in paragraphs 2 and 3 above a health board may, at its discretion, use support finance to relieve a local authority or other eligible organisation of all or part of the cost of purchasing or leasing NHS property. The health board may either make a payment to the organisation concerned under the support finance arrangements set out in this circular, or may instead forego all or part of the proceeds which would otherwise have accrued from the transaction. In the latter case, the income foregone may be treated as "expenditure" for the purpose for calculating the board’s expenditure against its indicative level of expenditure for support finance purposes (see paragraphs 16 and 17 of this circular).

Lease or Purchase of Other Land and Premises

5. A health board may also meet all or part of the capital or revenue expenditure incurred by an eligible organisation in purchasing or leasing other land or premises.

Revenue Support

6. In normal circumstances, a health board may only meet all or part of the recurrent rental charges incurred by an eligible organisation in leasing NHS or other property, and offset them against its indicative level of expenditure, to the same extent and over the same period as other support finance payments (the terms for which are set out in paragraphs 23-24 of this circular). If however the property concerned is used to enable former long-stay hospital patients to be transferred to more appropriate forms of care in the community, the proportion of the rental charges and the length of time for which a health service contribution may be made will be at the discretion of the health board concerned (see paragraphs 25-27 of this circular).

Reversionary Interest of the Secretary of State

7. When property, whether or not it was originally owned by the Secretary of State for health services purposes, which was purchased by an eligible organisation with the assistance of support finance in terms of the arrangements outlined in this annex ceases to be used for purposes specified in the original or any subsequent agreement, the Secretary of State must be reimbursed with the appropriate part of the current market value of the property as assessed by the District Valuer if the property is retained by the organisation concerned, or of the proceeds if it is sold for the best price obtainable; in either case the first £100,000 or such amount applying at the time would be made over to the health board.

8. Any lease of NHS property under these special arrangements will be subject to the condition that the use to which it is subsequently put may not be changed without the prior approval of SHHD. If the property ceased to be used for purposes agreed as part of joint planning arrangements, the lease would terminate and the property would revert to the Secretary of State. In such circumstances, if the property was no longer required for NHS purposes, it would normally be offered for sale on the open market, subject to consideration being given to any alternative Government or health-related use.

9. If other property leased with the held of NHS finance ceases to be used for purposes agreed as part of joint planning arrangements, then:-

a. if it was leased on a recurrent rental, the appropriate part of the rent should cease to be a charge against the health board;

b. it was leased on a capitalised rent, the health board should be reimbursed the appropriate part of the market value of the unexpired part of the lease, as determined by the District Valuer.

Use of local authority property by NHS

10. Local authorities should bear in mind that any land or premises owned by them and surplus to their requirements might in certain circumstances be suitable for NHS purposes or for projects developed as part of joint planning arrangements. In particular, health boards sometimes encounter difficulties in obtaining suitable sites for health centres, particularly in urban areas, and local authorities are asked to be as helpful as possible in making sites available, either by outright sale or by lease on payment of a capitalised rent.

ANNEX C to

Circular Nos. NHS 1985(GEN)18

SW 5/1985

SWD 15/1985

SED 1127/1985

MEMORANDUM OF AGREEMENT

NHS payments under support finance arrangements

....................................... Health Board

Project reference number: ......................................................

Title: ......................................................................................

1. PURPOSE OF PAYMENTS

The health board must establish that this expenditure on an alternative form of care can be expected to be more advantageous in terms of total care than if an equivalent amount was deployed on the health service, and that the expenditure in itself is cost-effective.

1.1 Give a brief description of the use to which the payments will be put, including a summary of the objectives of the facility or service involved, and the benefit that would accrue to the NHS:

1.2 Will the payments

a. provide an additional facility or service?

b. improve an existing facility or service?

c. maintain an existing facility or service which would otherwise be prematurely abandoned/

(delete those which do not apply)

1.3 Will this use of NHS finance

a. enable hospital patients to be transferred to a more appropriate form of care in the community?

b. prevent imminent and inappropriate admissions to hospital?

c. provide a less intensive form of community care which nevertheless benefits the health service?

Notes: Delete those which do not apply. In the case of a. or b. specify the number of residential or other care places to be provided and, where appropriate, the numbers of patients to be transferred from hospital to community care and of residents who would otherwise have had to be admitted to hospital.

2. RESOURCES

2.1 Details of buildings and/or equipment required:

2.1 Details of buildings and/or equipment required:

2.2 Staff requirements (optional information record) (give details of staff numbers by grade and describe arrangements for employment (ie contractual/permanent) and qualifications required, if any:

2.3 Location of staff (optional information record) (give details of arrangements for the accommodation of staff etc):

2.4 Proposed starting date:

3. ESTIMATED

Show financial year in which costs are expected to fall:

3.1 CAPITAL

3.2 REVENUE

Note: Where schemes extend over more than 3 years an additional sheet or sheets should be completed.

4. INFORMATION REQUIREMENTS

The local authority, voluntary organisation (for expenditure totalling more than £10,000 in any one year) or other body shall submit an annual voucher, in the attached from, to the health board certifying the expenditure which has been incurred in accordance with this memorandum of agreement.

5. SPECIAL CONDITIONS

ANNEX D to

Circular Nos. NHS 1985(GEN)18

SW 5/1985

SDD 15/1985

SED 1127/1985

ANNUAL VOUCHER

................................................................................................................................. COUNCIL

.............................................................................VOLUNTARY/OTHER ORGANISATION

PART 1 STATEMENT OF SUPPORT FINANCE EXPENDITURE FOR THE YEAR ENDING 31 March 19

PART 2 STATEMENT OF COMPLIANCE WITH CONDITIONS

I certify that the above expenditure, including any cost variations, has been incurred in accordance with the conditions specified in the memorandum of agreement with

........................................ Health Board dated ........................... and that it complies with the directions governing such expenditure which were made by the Secretary of State under s16A of the National Health Service (Scotland) Act 1978 and set out in NHS Circular No 1985(GEN)18.

Signed .............................................................. Date ...............................................................

Local Authority: Director of Finance

Voluntary Body or Other Organisation: Chairman, Director of Chief Financial Officer

PART 3 AUDITOR’S REPORT

We have examined the books and records of ................................................, and have obtained such explanations and carried out such tests as we considered necessary.

On the basis of our examination and of the explanations given to us we report that (subject to the reservations set out in the attached letter dated ...........................................)* the statement of support finance expenditure for the year ending ............................ is in agreement with the underlying records and in our opinion is in accordance with the relevant statutes, regulations and instructions.

Auditor .............................................................. Date ................................................................

Local Authority: Appointed Auditor under section 97 of the Local Government (Scotland) Act 1973.

Voluntary Body or Other Organisation: Member of one of the bodies listed in Section 97(7) of the Local Government (Scotland) Act 1973.

*delete if not applicable

6. CERTIFICATION

Certified that the foregoing is a correct record of the agreement.

.................................................................... .............................................................................

for Health Board for Local Authority/Voluntary

Organisation/Other Body

Position held ............................................. Position held ...................................................

Date ...........................................................

Notes:

1. A revised memorandum should be completed to record agreement on substantive changes, including cost variations other than agreed pay and price movements.

2. If 1.3(a) or (b) apply, copies of this memorandum should be sent to Mr C S Naldrett, NHS Management Executive, Directorate of Finance, St Andrew’s House, Edinburgh

EH1 3DE.