Birmingham health bosses have drawn up a plan to transform the city's health and social care system in a bid to avoid an estimated £712m funding black hole in the next five years.

Birmingham City Council and Solihull Metropolitan Borough Council have worked with the NHS to develop a Sustainability and Transformation Plan (STP) for the area.

The STP identifies three areas that need changing: the insufficient system wide focus on the use of resources; too much care that can be delivered elsewhere is being provided in hospitals; and too much variation in clinical services.

Cllr Mark Rogers, system leader of Birmingham and Solihull STP, and chief executive at Birmingham City Council, warned that if they carry on running their services as they are now, Birmingham would need an additional 430 hospital beds - the equivalent of a general hospital - by 2020 just to meet demand.

Cllr Rogers emphasised that this is an expensive option and one the council was not interested in pursuing. Improving social care would be the more effective approach, he said.

‘What’s needed is better community services that keep people well, independent and in their own homes,’ he explained.

‘This situation is set to get worse unless something changes, so organisations have come together in a way they haven’t before, with a real sense of commitment and purpose, to create a draft plan to transform the health and care system,’ Cllr Rogers continued.

‘Everyone is clear that this is a real opportunity to do things differently, building a stable, sustainable, high-quality, efficient health and care system that works for the people of Birmingham and Solihull.’

The Birmingham and Solihull STP is currently a draft submission to NHS England and the councils will be carrying out consultations with residents.

Cllr Paulette Hamilton, cabinet member for health and social care at Birmingham City Council, said: ‘I believe this is the right direction of travel and it is vital that we have a fully integrated health and social care system.

‘I would like to reiterate on behalf of Birmingham City Council our strongest possible commitment to a collaborative and place-based approach.

‘The council has consistently made clear that the funding crisis facing the social care system can only be addressed by a more imaginative whole system redesign and the STP I hope will be the starting point, and I urge people to give their views as part of our public and partner engagement.’

The Local Government Association (LGA) warned this week that social care faced severe ‘funding crisis’.

They said care for the elderly and disabled could be facing a potential funding gap of at least £2.6bn by the end of the decade.