The quality of early preparation and planning for the Better Care Fund - which encourages greater integration of health and social care services - did not match the scale of ambition.
So claims a National Audit Office report, which suggests early local plans for the fund did not meet ministers’ expectations or generate the level of savings the government expected.
All plans had to be subsequently re-submitted.
The Better Care Fund will pool £5.3 billion of existing NHS and local authority funding in 2015-16.
The aim is to deliver better, more joined-up local services to older and disabled people in the community and keep them out of hospital and avoid long hospital stays.
However, the government’s early planning assumption was that the Fund would save the NHS £1 billion in 2015-16, current plans forecast £314 million of savings for the NHS.
While the report recognises that the government programme to integrate local health and social care services is an innovative idea, it questions the potential for savings.
The Department of Health and the Department for Communities and Local Government developed the Fund’s policy, with NHS England and the Local Government Association responsible for the delivery and implementation of the fund.
It was agreed that local areas would develop plans for spending the fund with minimal central prescription, in order to drive local innovation from the bottom up, and reflecting the fact that no savings target had been formally agreed for the fund during Spending Round 2013.
As a result, there was no central programme team, no programme director and limited risk management and no analysis of local planning capacity, capability, or where local areas would need additional support, the report says.
In addition, the initial scheme guidance did not mention the scale of savings expected from the fund.
All 151 local health and wellbeing boards submitted plans in April 2014 for how they would spend their fund allocations in 2015-16.
But NHS England concluded in May that the Fund plans would deliver only £55 million of financial savings, not the £1 billion the Department of Health and NHS England expected.
The departments concluded that the plans required further development and ministers did not approve any plans in April, as originally intended.
Planning for the fund paused between April and July 2014 while the government reviewed and revised the Fund’s scope and how the £1 billion pay-for-performance part of the fund would work.
In July 2014, the departments revised and improved the fund’s governance and programme management, requiring local areas to submit new plans in September 2014 for expected approval in late October.
However these changes to the fund reduced from 11 months to five months the time available for local areas to prepare for the implementation of the fund from April 2015.
The Local Government Association does not agree with the changes in the Fund’s scope. It has said that the revisions undermine the Fund’s core purpose as promoting locally led integrated care and reduce the resources available to protect social care and prevention initiatives.
Under the fund’s revised conditions, local areas were asked to aim for at least a 3.5% reduction in their total emergency admissions over 2014 levels. Expecting such reductions within one year is ambitious against a trend of rising emergency admissions and feedback from local areas suggesting that some areas will struggle to meet this target.
Local areas have proposed reductions of 3.1%.
Almost two-thirds of the revised plans were either approved by ministers or approved with support and only 5 plans were not approved. The biggest risk area identified is to the protection of social care services with 21 local areas assessed as having significant risks.
Amyas Morse, head of the National Audit Office, said: “The £1 billion financial savings assumption was ignored, the early programme management was inadequate, and the changes to the programme design undermined the timely delivery of local plans and local government’s confidence in the fund’s value.
“Ministers were right to pause and redesign the scheme in April this year when they realised it would not meet their expectations.
“The fund still contains bold assumptions about the financial savings expected in 2015-16 from reductions in emergency admissions. To offer value for money, the departments need to ensure more effective support to local areas, better joint working between health bodies and local government, and improved evidence on effectiveness.”