CCGs fall foul of the NHS abacus

The missing beans causing consternation as CCGs try to figure out how they will balance their first year’s books relate to the £12bn swiped from the NHS commissioning budget and absorbed into the NHS Commissioning Board for spending on specialised services.

‘As ever in the NHS, the impact of this budgetary and policy change is lumpy’

The move was well trailed, and there are strong arguments in favour of centralising the commissioning expertise and buying power for specialist services. The problem is CCGs − perhaps naively − took it on good faith that a £12bn reduction in their commissioning budget would be backed up by a £12bn reduction in relevant “specialist” activity.

Up and down the country, CCGs are finding this is not so. The headache is not just one for the commissioners either. As ever in the NHS, the impact of this budgetary and policy change is lumpy.

Whereas it may be quids in for some large specialist and tertiary hospitals, smaller hospitals − unable to offset losses incurred on non-specialist patients with gains expected on those services commissioned directly by the commissioning board − are also worried about an impending pinch.

Joyful collaboration

And so that most favourite of NHS concepts, the “cost shunt”, has a new variant; the commissioning board cost shunt, in the form of a specialist service tax which may − or may not − transpire to be worth less than the value of the specialist activity that will follow it.

‘CCGs can look forward to a bumper budgetary increase… Oh, about a month before the election in 2015’

But amid the panic, an interesting response is developing from CCGs: risk-sharing agreements with neighbouring CCGs to effectively underwrite each other’s end-of-year position, and allow surpluses in one CCG to offset overspends in another.

Such collaboration in an era of austerity will be such a joy to Richmond House one even wonders if an erring-on-the-large-size specialist budget was intentional.

But as a budget based on a complicated new algorithm, it was inevitable the specialist budget would not hit the right number.

Doubtlessly it will be subject to revisions and corrections in the next couple of years. And if the CCGs are right, and the board’s chunk is too large, they can look forward to a bumper budgetary increase… Oh, about a month before the general election in 2015.

Sally Gainsbury is a news reporter for the Financial Times, sally.gainsbury@ft.com