Public Health Ring-Fenced Grant Conditions

LocalAuthorityCircularLAC(DH)(2016)3

To:TheChiefExecutive

CountyCouncils

DistrictCouncils (excludingDistrict Councils withaCountyCouncil)

LondonBoroughCouncils

Council oftheIsles ofScilly

CommonCounciloftheCityof London

Directors ofFinance

Directors ofPublic Health

Date: 18 December 2016

PUBLIC HEALTH RING-FENCED GRANT 2017/18

This circular sets out:

• Firm allocations of the local government public health grant for 2017/18;
• the conditions that will apply to that grant; and
• guidance intended to assist local authorities (LAs).

Background

The Chancellor’s Autumn Statement in 2016confirmed that LAs’ funding for public health would be reduced by an average of 3.9 per cent in real terms per annum over the five years to 2020. This equates to a reduction in cash terms of 9.6 per cent over the same period.

In 2017/18 the total public health grant to local authorities is £3.30bn(including the amount of business rate income that the ten Greater Manchester LAs will be able to retain in order to fund their public health function[1] which amounts to £213.4m), a reduction of 2.5% from the2016/17 baseline of£3.38bn. The grant will be ring fenced for use on public health functions exclusively for all ages.

On 15 December 2016, the Secretary of State determined, pursuant to section 31 of the Local Government Act 2003, to pay grants to relevant authorities in the amounts indicated for the financial year 2017/18.

This circular is accompanied by four annexes:

• Annex A – public health ring fenced grant determination and conditions 2017/18,

• Annex B – 2015 Autumn Statement announcement: Public health funding across the spending review years (2016/17 to 2020/21), England;

• Annex C – public health reporting categories for 2017/18; and

• Annex D – Public Health England assurance letter

The grant

The 2017/18 grant will be paid in quarterly instalments:

• Quarter 1 –Thursday13/04/17
• Quarter 2 – Friday 14/07/17
• Quarter 3 – Friday 13/10/17
• Quarter 4 – Friday 12/01/18

Pursuant to section 31(4) of the Local Government Act 2003 the Secretary of State has attached conditions to the payment of the grant, which are set out at pages 5-10 inclusive of Annex A and are unchanged from 2016/17. When assessing whether LAs have complied with these conditions, the Department and Public Health England will continue to look at the primary purpose of LAs’ spending.

The Department’s presumption is that the grant will be spent in-year. If at the end of the financial year there is any underspend LAs may carry these over, as part of a public health reserve, into the next financial year. In using those funds the next year, LAs will still need to comply with the grant conditions. The Department may consider reducing future grant amounts to LAs that report significant and repeated underspends.

Reporting of grant expenditure

Local authorities will need to forecast and report against the sub-categories in the Revenue Account (RA) and Revenue Outturn (RO) returns to the Department for Communities and Local Government (DCLG) who will share data with Public Health England (PHE). PHE will review data on behalf of the Department of Health. Given that the RO return is used as a way of monitoring the usage of the grant, it is important that the contacts responsible for this section of financing are content with the figures submitted. LAs will need to ensure that the figures are verified and in line with the purpose set out in the grant conditions. A list of the reporting categories is at Annex C. LA chief executives (or Section 151 officers) and directors of public health will also need to return a statement confirming that the grant has been spent in accordance with the conditions. A suggested statement is at Annex D.

In-year reporting

LAs will need to submit quarterly data returns of spend on public health (total mandated and non-mandated services) as part of the existing Quarterly Revenue Outturn report.

Year-end reporting

At the end of the financial year LAs will need to return a more detailed RO return. Expenditure must be shown against all prescribed functions categories which are classified in Annex C.

The full grant must be accounted for in the RO returns. As such the closing value of a LA’s public health reserve minus the opening value of the public health reserve when added to the net spend reported in the year, must be greater than or equal to the value of the grant for the year.

The reporting categories are flexible and allow local discretion about how to reflect the services that are commissioned. Guidance is available to local authorities in the Service Reporting Code of Practice (SeRCOP) on how activity should be recorded against the sub-categories.

Enquiries

Enquires about this circular should be addressed to the Department of Health Public Health Policy and Strategy Unit, at:

AnnexA

DETERMINATION UNDER SECTION 31 OFTHE LOCAL GOVERNMENTACT

2003 OFARING-FENCED PUBLIC HEALTHGRANT TOLOCALAUTHORITIES FOR 2017/18

PUBLIC HEALTH RING-FENCED GRANT DETERMINATION 2017/18:No 31/2912

The SecretaryofStatefor Health(“the SecretaryofState”),in exerciseofthe powers conferredby section 31ofthe LocalGovernmentAct 2003,makesthefollowing determination:

Citation

1) This determination may be cited as the Public Health Ring-fenced Grant

Determination 2017/18:No 31/2912

Purposeof thegrant

2) This grantcanbe usedfor bothrevenueandcapital purposes.

3) The purposeofthe grantis to providelocal authorities inEnglandwith thefunding required to dischargethepublic healthfunctions detailedinparagraphs 2-4onpage

5.

Grantconditions

4)Pursuanttosection31(4)oftheLocal GovernmentAct2003,theSecretary of Statedetermines thatthegrantwillbepaidsubjecttotheconditionsset outatpages 5 to 10 inclusive.

Determination

5)TheSecretary ofState determinesas the authoritiestowhichthegrantis to be paidandthe amountofgranttobepaidinthefinancialyear 2017-18,theauthorities andthe amounts for thefinancial year 2017-18are set out in the exposition book.

Treasuryconsent

6)BeforemakingthisdeterminationtheSecretaryofStateobtainedtheconsentof theTreasury.

Signed byauthorityoftheSecretaryofStatefor Health

Simon Reeve

Deputy Director - Public Health Systems and Strategy

Departmentof Health

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GRANT CONDITIONS

1.In this Determination:

“an authority” means an upper tieror unitarylocal authorityidentifiedin the

Appendix.

“theDepartment”means theDepartment ofHealth;

“financial year”meansa periodoftwelvemonths ending31stMarch2018.

“NHS body” means anNHS body withinthe meaning ofsection75ofthe

National HealthServiceAct2006;

“grant” meanstheamountssetoutintheRing-fencedPublic HealthGrant

Determination 2017/18:

“upper tier andunitarylocal authorities”means:acountycouncilinEngland;a districtcouncilinEngland,other thanacouncil for a districtinacountyfor whichthere is acountycouncil;aLondonboroughcouncil,theCouncilofthe Isles ofScilly; and theCommonCounciloftheCityof London.

Useof thegrant

2.Pursuantto Section31 oftheLocalGovernmentAct2003,theSecretaryof Stateherebydetermines thatthepublic healthgrantshallbepaidtowards expenditureincurred,or to beincurred, byupper tier andunitarylocal authoritiesinthefinancial year2017/18.Therelevant authorities[2]areshown in the exposition book.

3.Subjecttoparagraph5,the grantmustbe usedonlyformeetingeligible expenditure incurred or tobeincurred bylocal authoritiesfor thepurposesoftheir public healthfunctionsas specifiedinSection73B(2) oftheNational HealthService Act 2006(“the2006 Act”).

4.Thefunctionsmentionedinthatsubsectionare:

(a)functions under section 2B,111 or249 of, orSchedule1 to,the2006

Act

(b)functions by virtueofsection6C ofthe 2006Act,

(c)theSecretaryofState’s publichealthfunctions exercised bylocal

authorities inpursuanceof arrangementsunder section7Aofthe2006

Act,

(d)thefunctionsofalocal authorityunder section325 oftheCriminal Justice Act2003(co-operating with the police, the probation service and the prison service to assess the risks posed by violent or sexual offenders),and

(e)suchotherfunctions relatingtopublic health as maybeprescribed.

5.A local authoritymayuse thegranttocontribute toafundmadeupof–(a) contributionsbytheauthorityfromboththepublic healthgrantand other sourcesoffundinge.g.from other localauthorityfunding, orfrom paymentsmadebyaprivatesector or civilsocietyorganisation;or

(b)contributionsbytheauthorityandoneormoreof anyofthefollowing bodies

(i) another local authority,

(ii)anNHS or other public body, or

(iii) aprivatesector orcivil societyorganisation;

provided theconditions specified inparagraph6aremet.

6.Theconditions referred toinparagraph5arethat:

(a)thefundmustbeone outofwhich paymentsare madetowards expenditureincurredintheexerciseof,orfor thepurposes of, the functions describedinparagraph3;

(b)if payments aremadeout ofthefund towardsexpenditureon other functions ofalocal authorityor thefunctionsofanNHS body, other public body, or aprivatesector or civilsociety organisation,the authoritymustbeofopinionthatthosefunctions haveasignificant effectonpublic healthor haveasignificanteffecton,orinconnection with,the exerciseofthefunctionsdescribedin paragraph 3;

(c)theauthoritymust besatisfiedthat,havingregard to thecontribution fromthepublic health grant, thetotal expenditure tobemetfrom the fundandthepublic healthbenefitto bederivedfromtheuse ofthe fund,the arrangements providevalueformoney.

7.A local authoritymust,in usingthe grant:

haveregard totheneed toreduceinequalities betweenthepeopleinits areawithrespecttothe benefitsthattheycan obtainfromthatpartofthe healthservice providedin exerciseofthefunctions referredtoin paragraph3;

haveregard totheneed toimprovethetake upof,andoutcomesfrom,its drugandalcohol misuse treatmentservices.

8.Thepublic health grant will onlybe paidtolocal authorities tosupport eligible expenditure.Grantcarried over tothefollowingyear is governed bythegrant conditions.

Eligibleexpenditure

9.Eligible expendituremeansexpenditure incurred byanauthorityor anyperson actingonbehalfofanauthority, between1 April 2017and31March2018,for thepurposes ofcarryingoutthepublic healthfunctions referredtoin paragraphs3and4.

10.If anauthorityincurs anyofthefollowingcosts, thosecostsmustbeexcluded from eligible expenditure:

a) contributions inkind;

b) paymentsforactivitiesofapolitical orexclusivelyreligious nature;

c) depreciation,amortisation or impairmentoffixed assetsowned bythe authority;

d) inputVATreclaimablebytheauthorityfrom HMRevenueCustoms;

e) interestpayments or servicecharge payments forfinanceleases;

f)gifts,other than promotional items, withavalueofnomorethan£10in ayear toanyonepersonsubjecttotheexceptionin paragraph[11];

g) entertaining(entertainingfor this purposemeans anythingthatwould beataxablebenefit tothepersonbeingentertained, accordingto currentUK taxregulations);

h) statutoryfines,criminal finesor penalties.

11.Expenditureonpromotional items infulfilmentofthelocal authority’s health improvementdutyunder Section2B ofthe2006 Actsuchasproducts,goodsor serviceswhich are givenfor healthimprovementpurposesmayformpart of eligible expenditure.This couldincludeforexample,vouchersfor gym or

fitness classes,nicotine patchesor other expenditure whichcorresponds with thehealthimprovement objectives ofthepublic healthgrant.

12.Anauthoritymustnotdeliberatelyincur liabilitiesfor eligible expenditure before there isanoperationalneedfor ittodoso.

13.For thepurpose ofdefiningthetime of payments,anauthorityshallaccountfor its spendfromthegrant usingthe accrual basis ofaccounting[3].

Paymentarrangements

14.Grantswill be paidinquarterlyinstalmentsbyPublic HealthEngland.

Reporting

In-year reporting

15.Anauthoritywill needtosubmit threehigh-level public healthreturns(Quarterly Revenue Outturns)at quarterlyintervals duringtheyear,for thequarters ending inJune,September andDecember. In accordancewith existingpractice, this willbesubmittedto theDepartmentfor Communities andLocal Government (DCLG) whowill share themwithPublic Health England(PHE). PHE will review thereturnsonbehalfoftheSecretaryofStatefor Health.

End-ofyear reporting

16.Eachauthorityshallprepareareturnsettingouthowthegranthasbeenspent usingtheRevenueOutturn (RO)formatthe endofthefinancial yearcovering

theperiod1April 2017to31March2018.Inaccordancewith existingpractice, this will besubmitted toDCLGwhowill share theinformationwithPHE.Alist ofthelinesof expenditure (categories)thatwill needtobereportedonis attachedatAnnex C.TheROformmust providedetails of eligible expenditure intheperiod, againsteachrelevantcategory.

17.Thereturnsmustbecertified bytheauthority’s ChiefExecutive(or the authority’s S151Officer)andtheDirectorofPublic Healththat,tothebest of theirknowledge,the amountsshown ontheStatementrelatetoeligible expenditureonpublic health andthatthe granthasbeenusedforthe purposes intended,as setoutinthis Determination.Chief Executives have been providedwithastatement ofassurancefortheirsignature atAnnexD.This shouldbesubmittedtoPublic HealthEnglandat:

18.TheSecretaryofStatemayrequireafurtherexternal validationtobecarried outbyanappropriatelyqualifiedindependentaccountant orauditor oftheuse ofthegrantwhere theRO return referredtoin paragraph16abovefails to providesufficient assurancetotheSecretaryofStatethatthegranthas been usedin accordancewith theseconditions.

19.Whilethegrantshouldnotbeusedfor interestor servicecharge payments or financeleases itcanbe usedfor capital spend onitems thatdonotentail borrowingor afinancelease.Capitalexpenditure shouldbenoted asaCapital ExpenditurefromRevenueAccount(CERA) paymentontheROformand detailsprovided ontheCapital Outturn Return (COR)formissued bythe Departmentfor CommunitiesLocal Government(DCLG). Furtherguidance willbesuppliedwith theforms thatDCLGsend out.

20.In accordancewith existingpractice,local authorities shouldsendtheROto

DCLG.

FinancialManagement

21.Eachauthoritymust maintainarobustsystemofinternalfinancial controls and informtheDepartmentpromptlyof anysignificantfinancial control issues raised byitsinternal auditors inrelation tothe useofthepublic healthgrant.

22.If anauthorityidentifies anyoverpayment ofthegrant,theauthoritymustrepay this amountwithin30days ofitcomingtotheir attention.

23.If anauthorityhasanygroundsfor suspectingfinancial irregularityintheuse of anygrant paidunder thisfundingagreement,it mustnotifytheDepartment immediately, explainwhatstepsare beingtakentoinvestigate thesuspicion andkeeptheDepartmentinformedabouttheprogress oftheinvestigation.For thesepurposes “financial irregularity” includes fraudorother impropriety, mismanagement,and the useofthegrantforpurposes other thanthosefor whichit was provided.

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External auditarrangements

24.Appointedauditorsareresponsiblefor auditingthefinancial statementsof each authorityandforreachingaconclusiononanauthority’s overallarrangements for securingeconomy,efficiencyand effectiveness intheuse ofresources.The useof,andaccountingfor, thepublic healthgrantandthearrangementsfor securingeconomy,efficiencyandeffectiveness in doingsofallwithinthescope ofthework thatappointedauditors mayplantocarryout,havingregard tothe risk ofmaterial error intheauthority’s accounts andsignificance.

Records to bekept

25.Eachauthoritymust maintainreliable,accessible andup todateaccounting records with anadequateaudittrailfor allexpenditurefundedbygrantmonies under this Determination.

26.Eachauthorityandanypersonacting onbehalf ofanauthoritymustallow: a) theComptroller andAuditorGeneral or appointedrepresentatives; and b) theSecretaryofState or appointedrepresentatives;

free access atallreasonabletimes to alldocuments(includingcomputerised documentsanddata) andother information asis connectedto thegrant payableunderthis Determination,or tothepurposesfor whichgrantwas used, subjecttotheprovisions in paragraph27.

27.Thedocuments,data andinformationreferredtoinparagraph26aresuchas theSecretaryofStateor theComptroller andAuditorGeneral mayreasonably require for thepurposes oftheSecretaryofState’s or theComptroller and AuditorGeneral’s financial auditorthatanydepartment orother public body mayreasonablyrequirefor thepurposes ofcarryingout examinations intothe economy,efficiencyandeffectiveness withwhichanydepartment orother public bodyhasusedits resources.Anauthoritymust providesuchfurther explanationsasare reasonablyrequired for thesepurposes.

28.Paragraphs25and26donotconstitutearequirementfor the examination, certificationor inspectionofthe accountsofan authoritybytheComptroller and AuditorGeneral undersection6(3) oftheNational AuditAct1983.The Comptroller and Auditor General will seek access inameasuredmanner to minimiseanyburden on theauthorityandwillavoid duplication ofeffort by seekingandsharinginformationwith theAuditCommission.

Breach of Conditionsand RecoveryofGrant

29.If anauthorityfails tocomplywith anyoftheseconditions,or anyoverpayment is madeunder this grant, oranyamountis paidin error, or if anauthority’s ChiefExecutive/S151Officer andDirectorofPublic Health areunableto providereasonableassurancethattheROform,inallmaterial respects,fairly presentsthe eligible expenditure,in therelevantperiod,inaccordancewith the definitions andconditions inthis Determination, or anyinformation providedis incorrect,theSecretaryofStatemayreduce,suspendor withholdgrant

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paymentsor require therepayment ofthewhole or anypart ofthegrantmonies paid,asmaybedetermined bytheSecretaryofState andnotifiedinwritingto theauthority.Suchsum ashasbeennotifiedwill immediatelybecomerepayableto theSecretaryofStatewhomaysetoff thesum againstanyfuture amountdueto theauthorityfromcentral government.

Underspends

30.If there arefunds leftover at theend ofthefinancial year theycanbecarried over into thenextfinancial year.Funds carried over shouldbe accountedfor in public healthreserve. Allthe conditionsthat applytotheuseof thegrant will continueto applyto anyfunds carriedover. However,where thereare large underspends the Department reserves therighttoreduce allocations infuture years.

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Appendix

Public Health Allocations to unitary and upper tier local authorities

in Englandfor 2017-18

Note:

“**” Local authorities in Greater Manchester piloting 100%business rate retention will not receive this grant and are excluded from the grant conditions.

Annex B

Public health grant settlement for 2016-17 to 2020-21- England

AnnexC

Categoriesfor reporting localauthoritypublichealth spendin 2017/18

Prescribed functions:

1)Sexual healthservices- STI testingandtreatment

2)Sexual healthservices–Contraception

3)NHS HealthCheck programme

4)Localauthorityroleinhealth protection

5)Publichealthadvice to NHS Commissioners

6)National ChildMeasurementProgramme

7)PrescribedChildren’s0-5 services(awaiting the outcome of the review on the regulations attached to the 0-5 services)

Non-prescribed functions:

8)Sexual healthservices- Advice, prevention and promotion

9)Obesity–adults

10)Obesity- children

11)Physical activity– adults

12)Physical activity- children

13)Treatment for drugmisuseinadults

14)Treatment for alcoholmisuse inadults

15)Preventing and reducing harm from drug misuse in adults

16)Preventing and reducing harm from alcohol misuse in adults

17)Specialist drugs and alcohol misuse services for children and young people

18)Stopsmokingservices andinterventions

19)Wider tobaccocontrol

20)Children5-19public healthprogrammes

21)Other Children’s0-5servicesnon prescribed

22)Health at work

23)Public mental health

24)Miscellaneous,whichincludes:

oNutritioninitiatives

oAccidents Prevention

oGeneralprevention

oCommunitysafety,violencepreventionsocial exclusion

oDentalpublic health

oFluoridation

oInfectious diseasesurveillance andcontrol

oEnvironmental hazards protection

oSeasonaldeathreduction initiatives

oBirthdefect preventions

oOther public health services

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AnnexD

Year End StatementofAssurance

[Insert nameof localauthority] Date:DD/MM/YYYY

StatementofAssurance: Ring-fenced PublicHealth GrantDetermination

2017/18:No 31/2912

Thering-fencedpublichealthgrant,intheamountof £……………………… has been providedtothis local authoritytowards expenditureincurredinthe2017/18financial year.

As theauthority’s ChiefExecutive/ Section 151Officer*, Ihavereviewed the publichealth Revenue Outturn(RO)formandcanconfirmthatthegranthasbeenusedto discharge thepublic healthfunctions setoutin Section73B(2)oftheNational Health ServiceAct 2006(as amended bytheHealthandSocial CareAct2012). Ialso confirm thattheamountsstatedintheROform area truereflection ofhowthegrant has beenspent,includinganyamountsheldin theauthority’s public healthreserve.

Iaffirmthatwherefundinghas beencombined('pooled')with fundsfromother sourcesthemonieshavebeenused in accordancewith theconditions attached to the grant.

[Signed/Name/Position] [Signed/Name/ Position]

ChiefExecutive/ S151 Officer * Director ofPublicHealth

(*Pleasestatepositionof signatory,andcapacityinwhichsigned(Chief Executiveor S151Officer)

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[1] Local authorities in Greater Manchester piloting 100% business rate retention will not receive this grant and excluded from the grant conditions.

[2] Local authorities in Greater Manchester piloting 100% business rate retention will not receive this grant and excluded from the grant conditions.

[3]Accrual accounting depictsthe effectsoftransactionsand othereventsand circumstances on an authority’seconomic resourcesandclaimsin theperiods in which those effectsoccur, even iftheresultingcashreceiptsandpaymentsoccurina differentperiod.” paragraph 2.1.2.5 of the 2016/17 Code of Practice on Local Authority Accounting in the United Kingdom.CIPFA, April 2016