A clinical commissioning group has been placed under legal directions by NHS England after reporting a £27m overspend.

NHS England said today “serious performance, planning, financial and leadership weaknesses” had been identified at Coastal West Sussex CCG.

It will now be directed to carry out a governance review, a “capacity and capability action plan”, and develop a recovery plan.

The CCG was required to break even in 2016-17, but said the deterioration was due to a “a number of factors, including increased demand for services, a challenging savings target, and investment in services including those to ensure patients received treatment within the national target of 18 weeks”.

Its main provider is Western Sussex Hospitals Foundation Trust, which is reporting one of the strongest financial positions in the country, with a £12m surplus in the nine months to December.

The CCG said its year-end outturn was forecast to be a £20m overspend because £7m of contingency funding will boost the position in the final accounts. This refers to the 1 per cent “risk reserve” that NHS England has forced all CCGs to hold back from their allocations.

However, the CCG has also highlighted £10m worth of risk related to planned savings that will not be confirmed until the end of the year.

There have been examples in recent weeks of CCGs being told to maintain their official financial forecasts by NHS England, despite their actual position deteriorating significantly.

A paper set to go before the CCG’s governing body next week says: “From month six onwards NHS England required the CCG to report an unchanged forecast outturn position each month of a £0.25m surplus but to reflect a level of risk to achievement of this revised forecast.

“In December the CCG reported to the governing body that there was a risk of £19.4m to delivery of the £0.25m surplus…

“From month 10 onwards NHS England has asked the CCG to crystallise these risks into a reported deficit in line with other CCGs in a similar position nationally.”