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CCGs told to set aside more than £2bn of budgets

Clinical commissioning groups are being told to set aside more than £2bn of their budgets in their first year of operation.

Leaders from several groups have been told that in 2013-14 they will need to plan to make a 1 per cent surplus and to set aside a further 2 per cent contingency, which they will not be able to spend on routine services.

The figures have been described to CCGs as “expectations” by regional finance chiefs. The NHS Commissioning Board will publish the financial and planning framework, which is likely to confirm the figures, next month.

Similar rules have been in place for primary care trusts since 2010. However, some leaders had believed they would not apply to CCGs, which have been promised more autonomy.

The requirements come amid controversy over the return of part of the overall Department of Health surplus to the Treasury in 2011 and 2012.

Where PCTs have achieved a surplus, it has formed part of the overall DH surplus, although part of it has generally been carried over to their budget for the following year. For CCGs the 1 per cent would amount to about £647m.

CCGs have also been told to set aside a further 2 per cent, which would amount to about £1.3bn nationally. They have not been told how it would be handled and enforced in the new system.

Some CCGs have been told they may be required to plan for a minimum 0.5 per cent internal contingency, giving an additional £323m nationally. This means they would need to set aside £2.26bn next year.

Since 2010, 2 per cent of PCTs’ budget has in most cases been topsliced and retained by strategic health authorities. Sums have generally been released when PCTs specify non-recurrent spending plans.

It is thought a significant part of the funds has been spent on managerial redundancies. The money has also formed a pool for bailing out struggling providers and PCTs.

One CCG finance director said the commissioning board’s options included retaining the sums itself, and encouraging or directing CCGs to create their own regional funds.

Bedfordshire CCG chief operating officer John Rooke, commenting on the plans, said groups should be treated as “mature organisations”, which could decide for themselves how to use the funds.

Readers' comments (9)

  • I don't understand why any GP worth his or her salt would want to be involved in a CCG whose first day at school will involve having their hands tied behind their backs.

    Time to resign whilst the going is good!

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  • Anon 12.32
    Surely this is sensible policy for the first year while the new system beds in and unforseen issues are dealt with. Then start to withdraw the shackles in years 2 and 3 when the system is proven sound.

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  • This is PCT policy to ensure sound financial management and resilience so why wouldn't it apply when the lunatics take over the aslyum?

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  • Ongoing and persistently starving the system of resources; forcing much higher percentages of Provider income to be funded non-recurrently and from which the plug can be pulled at any time, sending services into a tailspin and tightening the iron grip of central control. Between DH Policy and Monitor, the Provider sector is slowly but surely be strangled.

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  • Planning contingencies to cope with the intrinsic variability in demand is no bad thing. Now we need to see DH/NCB using some of the surplus to address unexpected cost pressures like the continuing health care retrospective claims.

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  • Shane - Continuing healthcare retrospective claims are only unexpected cost pressures in those parts of the NHS that thought it was a good idea to deny frail older people their right to NHS-funded care.

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  • if CCGs inherit PCT deficits and have to put aside 3%, and then pay surplus back to DH, isn't this just a cut in service provision by another name? I pity GPs trying to explain this to patients, rationing drugs and services when they should be the patient's alturistic friend. I suspect the high trust and reputation of GPs may be in for a bashing.!

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  • Withholding 2% will surely lead to the NCB having a big lever to performance manage CCGs. I'm sure we will be back to a one size fits all solution where even the best performing CCGs will have to justify any draw down of the 2% and the worst performing will be starved of 2% of their resources which might otherwise get them through a sticky patch - can't wait for the new bureaucracy, welcome back SHAs.

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  • This seems like sensible policy.

    Aim to be in a slightly better position than where you need to be, so when you can manage a few surprises and allow a little slippage (as all evidence in health and all industries suggests you probably will), you are not in a crisis position.

    That said, I think there is a valid question of how much this should have been prescribed, given we are promoting local autonomy. Given that overspending in one locality means another, more prudent (or more lucky), locality will be forced to transfer resources, setting some playing rules such as minimum targeted underspends seems like a rational response to me.

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