Fair funding and contractual arrangements for community mental health services

Posted on 26 July 2023

On behalf of the VCSE (Voluntary Community and Social Enterprise) sector across Sussex, appointed Reps, including Neil Blanchard, our Chief Executive, wrote to mental health commissioners to share the current challenges facing the sector and to ask that they are considered when planning and funding decisions.

This letter is part of Southdown’s ongoing commitment to doing what we can to support and represent the wider VCSE sector in the best interests of the local Sussex communities we exist to serve.

OPEN LETTER: Market position update on Sussex VCSE Community Mental Health services  

At the start of the 2023 financial year, we wrote to provide an update on the market position of VCSE community mental health services. Our aim was to ensure that the ICS (Integrated Care System) were fully aware of the challenges facing the VCSE sector, and what requests we were seeking ahead of the start of the 2023/34 financial year.

Our requests for 2023 were:

• For all current contracts to receive a 5% uplift for 2023/24
• Any contract extensions need to be subject to annual funding reviews based on inflationary pressures (ending static funding levels over the length of contracts)
• Where funding no longer covers service costs, for providers and commissioners to renegotiate revised service offer deliverable for the year ahead
• Where possible, new contracts to be minimum 5 years with +2 year extension options
• At least six months’ notice given to end contractual terms or where ongoing funding will not be continuing
• Other procurement and contracting models are developed to enable quicker implementation and mobilisation of new investment and models e.g. developed alliance contracting arrangements and advance setting up of Framework Agreements of approved providers
• A commitment to collaborate with stakeholders to find solutions

We appreciate that we did receive a response to our initial market position update in February 2023, but as we enter Q2 of the 2023/24 financial year, we write to express our ongoing concerns with how our requests are being considered and responded to, key issues being:

• Delay in receiving confirmation/payment of changes to contract uplifts. Only at the very end of June were West Sussex providers informed of decisions, with no formal confirmation yet received (17^th July) for Brighton & Hove and East Sussex. This is despite all providers having to set their own budgets and make decisions on staff pay awards during February/March. The VCSE having to hold this business risk is unacceptable and the NHS needs to improve how it manages the provider market, considering the sectors business and financial planning and governance sign-off timetables.
• The resultant 1.8% fee uplift clearly falls far short not only of inflation, but the sector request of 5%. Although we appreciate the immense financial pressures on the NHS and Sussex ICS, such minimal funding increases, after years of cumulative low or no uplifts we will not be able to sustain service levels indefinitely. We note that Contract Managers and Commissioners will now be in touch to work through implications on individual services, but we wish to highlight that providers will need to review and adapt service offers, not just find efficiency savings.
• Disparity between fee uplifts for NHS and Local Authority, with NHS at 1.8% but Adult Social Care and other central Government funding being c10%. With the NHS stating so clearly that it values the increasing role of the VCSE in helping it meet its own challenges, the lack of Full Cost Recovery funding will restrict the willingness and ability for the VCSE to have confidence of the NHS as a strategic partner.

Taking forward our requests in 2023/ 24:

As VCSE Strategic Representatives, we continually consult and liaise with the sector to consider how best we can combine our voice, experience and expertise to work with statutory partners to shape a better future for mental health services. Through this work we have clarified our key priorities and activities for the coming year, sharing this with you so you can engage effectively with us.

Individual contract reviews

As an outcome of the 1.8% funding for 2023/24, with indications of low increases in subsequent years, we request that as commissioners engage with individual providers, there is an appreciation and acceptance that with real term reductions in funding, service offer is likely to need to be adapted/reduced. Although the VCSE sector is committed to playing a role in future solutions, it is no longer willing or able to cross-subsidise shortfalls in statutory funding. To aid these discussions, it would be useful to have this acknowledged in communication from the ICS to the sector.

VCSE Strategic Leadership Group

To coordinate activities and monitor progress, as VCSE Strategic Representatives, we have established a pan-Sussex VCSE Mental Health Strategic Leadership Group. The Group will take a proactive approach, acting as a central contact point and collective sector voice, leading discussions, clarifying VCSE issues, making requests and bringing the system to account for the progress they make to fully engage and realise the potential of the VCSE.

In consultation with VCSE Mental Health Network members, the Group have established five priority goals for 2023/24:

1. Strengthen VCSE influence and participation in mental health programmes and workstreams within the Sussex ICS
2. Better commissioning, procurement, and contracting process, which meet the needs of VCSE organisations and supports capacity building
3. Lobby for sustainable funding for VCSE services
4. Support the development of a Sussex VCSE ICS Leaders Alliance and Commissioning Framework
5. Develop a work programme with Sussex Partnership NHS Foundation Trust (SPFT) Executive Team to strengthen their partnerships and sub-contracting with VCSE Mental Health providers

The Group, chaired by Neil Blanchard, Chief Executive of Southdown, meets quarterly and will monitor and track progress to achieve these five goals, inviting ICS statutory representation as required. We ask that the ICS uses this group, along with the local Mental Health Networks, as the main routes of engagement with the Mental Health provider sector.

VCSE involvement in design architecture

We are informed that the ICS is currently within a ‘design phase’, reviewing services and structures, with the aim to create greater certainty in subsequent years. Clearly, longer-term planning will be vital, but we seek clarity on how the VCSE can and will be involved in the design process – as a Strategic Partner as opposed to a consultee. We feel that without fully involvement of the VCSE, there is a lack of diversity of thinking and business expertise that can help consider new ways of working to the ‘wicked issues’ facing the health and social care systems.

We would be grateful for a response to this market position update, ideally with a scheduled online meeting to be arranged.

Yours sincerely,

Strategic lead representatives on behalf of the VCSE sector

• Neil Blanchard, Chief Executive of Southdown, Chair of  VCSE Strategic Leadership Group & East Sussex VCSE Rep
• Kerrin Page, Chief Executive of West Sussex Mind & West Sussex VCSE Rep
• Rachael Swann, Chief Executive of Grassroots & Joint B&H VCSE Rep
• Lisa Dando, Director of Brighton Women’s Centre & Joint B&H VCSE Rep
• Hilary Bartle, Chief Executive of Stonepillow & West Sussex CYP VCSE Rep
• Sally Polanski, Chief Executive of Amaze & East Sussex CYP VCSE Rep
• Rachel Brett, Director of Downslink YMCA & B&H CYP VCSE Rep