Key COVID-19 legal developments in the health sector: NHS Standard Contract developments

Published 3 April 2020

Following the letter from Sir Simon Stevens and Amanda Pritchard dated 31 July 2020 setting out the third phase of the NHS response, effective from 1 August 2020, guidance on this third phase has also been published on 7 August 2020 to provide a range of supplementary materials to support implementation.

The letter provides an update on the latest COVID-19 national alert level, sets out priorities for the rest of 2020/21, and outlines the financial arrangements agreed with Government heading into Autumn. The priorities include:

• Accelerating the return to near-normal levels of non-COVID-19 health services;
• Preparation for winter demand pressures; and
• Implementing lessons learned during the first COVID-19 peak.

The current financial arrangements for CCGs and NHS trusts will largely be extended to cover August and September 2020, with the aim being to implement a new financial framework for the latter part of 2020/21.

The intention for the new financial framework is that simplified arrangements for payment and contracting will be retained, but with a greater focus on system partnership and the restoration of elective services. This will include funding envelopes comprising:

• CCG allocations for services commissioned from NHS providers;
• Directly commissioned services from NHS providers;
• Top-up funding to support delivery of a breakeven position; and
• Non-recurrent COVID-19 allocation to cover COVID-19-related costs for the remainder of the year.

Nationally calculated block contract arrangements will continue for arrangements between commissioners and NHS providers and written contracts with NHS providers will not be required for the remainder of 2020/21.

The guidance sets out the actions that are required to implement the third phase.

From a financial point of view, a fundamental principle of the implementation of the third phase is that it will be STP/ICS led. STPs and ICSs are being asked to plan for and deliver the goals set out for the third phase by submitting the following:

• 1 September 2020 – a draft numerical submission providing forecasts of activity and performance measures to cover the last 7 months of the 2020/21 financial year covering specific activity and performance metrics (set out in Appendix 1 of the guidance); and
• 21 September 2020 – a final submission of the above, along with system level 'Local People Plans’ including workforce plans for the last 7 months of the 2020/21 financial year.

It is expected that STPs and ICSs will produce these plans in collaboration with partnering organisations and consider alignment between CCGs and providers, and correlation between activity and workforce.