Health and social care integration - financial assurance: guidance

2. Assurance and Integration

It has been noted^[1] that many of the challenges of public sector mergers stem from the fact that they tend to be externally imposed on the bodies and that Health Boards, Local Authorities and senior management teams often feel that they are being thrown into a process over which they have little control. This introduces additional risks to the success of the new arrangements and to existing operations during the transition period.

Audit Scotland's June 2012^[2] report emphasised a number of lessons that public sector bodies can learn from to minimise these risks, including the importance of strong leadership, effective planning for transition and implementation and assessing performance.

An effective assurance process should enable the host body (whether an Integration Joint Board (IJB) in a corporate body arrangement; or a Health Board or Local Authority in a lead agency arrangement) to identify the resources delegated to it and the financial, legal or organisational risks involved; it should also help the delegating partners to quantify the risks to their respective operations. If planned and implemented in a logical sequence, it should allow the Health Board and Local Authority to maximise the benefits and minimise the risks from integration.

Typically, an assurance process covers three main areas:

• Legal
• Financial
• Operational

The focus of this guidance is on financial assurance, but it is recommended that partners coordinate their activities across the three domains as work in one area can often inform work in another.

A formal process of financial assurance will typically involve an exhaustive review of all relevant documents and records in an effort to assess the resources and risks associated with them. A similar process will be required for integration but it should be possible for partners to avoid some of the work by placing reliance on assurances from each other for their respective delegated resources and on the existing operational and financial knowledge of the shadow Chief Officer. This will clearly require a high degree of trust between the key officers.

It is recommended that Health Boards and Local Authority Directors of Finance and the shadow Chief Officer and shadow Chief Financial Officer of the IJB foster an assurance process based on mutual trust and confidence involving an open-book approach and an honest sharing and discussion of the assumptions and risks associated with the delegated services.

The assurance process should be proportionate to the potential risks and should cover the whole transition period from pre-integration, implementation and post integration.