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Written Statement - Welsh Government Response to PricewaterhouseCoopers Review of the Financial Ring Fencing Arrangements for Mental Health Services in Wales Report to the Minister for Health and Social Services

Mark Drakeford, Minister for Health and Social Services

In September, I announced the publication of the PricewaterhouseCoopers Review of the Financial Ring Fencing Arrangements for Mental Health Services in Wales report.  The report concluded that the purpose of the ring fence – to protect spending on mental health services in Wales – had largely been achieved.  The report also made a number of recommendations as to how investment in mental health services might be better linked to outcomes.

At the time the report was published in August, I confirmed that the ring fence would remain in place, and committed to make a further statement on the determinations made by the Welsh Government once the report’s findings had been discussed with key stakeholders.

The report confirmed that the ring fence has helped to protect expenditure on mental health services, and recommended that the arrangements should be retained, and strengthened by the adoption of an outcomes-based approach, supported by enhanced accountability; mental health needs assessment, and a suite of new financial indicators.  Once an outcomes based approach has been put in place and those outcomes secured, the report suggests that a ring fence may no longer be required.  

In order to influence strategic decision making the report further recommended that the ring fence arrangements be embedded in the core planning arrangements for NHS Wales.

The Welsh Government will take this forward through the NHS Planning Framework under which health boards produce Integrated Medium Term Plans (‘IMTPs’) covering a three year period, which are underpinned by a population health needs-based commissioning clinical and service plan.  Welsh Government will require health boards to strengthen the mental health component of the IMTPs, with mental health needs assessments and issues fully incorporated into the planning process, thereby ensuring that needs are identified, along with the planned service, workforce and financial requirements to meet these needs.  As the IMTP process develops over time, it will move towards the outcomes-based approach recommended in the report.

In the meantime the Welsh Government is working with NHS colleagues to improve the timeliness of programme budgeting returns, whilst also ensuring they conform with the publication of official statistics, as well as the availability, completeness and reliability of activity data.  In this way, the effectiveness of mental health expenditure will be scrutinised.

Whilst recognising that the programme budgeting reports are published each year, the review identified that the categorisation used in the returns is not always straightforward, and, as such, should be used with caution.

Welsh Government has already required that in future, health boards should report on their expenditure against the ring fence as part of their Together for Mental Health annual reports which are published on their websites.  In addition, progress and delivery against IMTPs will also be included in health boards’ main annual reports which will be published and presented at board meetings before the end of September following the end of each financial year. The review report recommended that the ring fence be reinforced by a set of outcome measures and financial indicators.

Further developments in this area will be based upon work already undertaken to develop a core mental health dataset, underpinned by service user-driven measures.  This work was piloted in 2014 and is now being implemented across health boards.  Work will also be progressed through the Improvement Division of Public Health Wales, to ensure that the mental health core data set is fully implemented in line with the roll out of the new common IT platform.  Any additional financial indicators required will be developed for incorporation in future Together for Mental Health annual reports.

More broadly, Welsh Government officials have worked closely with partner agencies and stakeholders to develop the next three-year delivery plan to support Together for Mental Health, which is currently out for public consultation.  The actions required by health boards to strengthen the ring fence arrangements have been incorporated within that plan.  Implementation will be scrutinised through the Mental Health Partnership Boards locally and at a national level, and public reporting will take place on a yearly basis through the publication Together for Mental Health annual reports.  Further requirements of health boards will continue to be set out on an annual basis in the IMTP planning guidance to health boards.  In addition, the report recommendations will be considered as part of phase two of the resource allocation review of continued ring fencing of allocations within integrated health organisations.