• NHS England regional team advises CCGs to plan for 5 per cent “year on year” cuts to running cost budgets
  • Midlands and East commissioners also asked to continue planning to keep a 1 per cent surplus

NHS England has told clinical commissioning groups in the Midlands and East region to plan for sizeable cuts to their administration budgets for the next three financial years, HSJ has learned

The national body’s regional team has advised the CCGs to plan for 5 per cent “year on year” reductions to their running cost allowances. There are 61 CCGs in the region.

It has told local CCGs to submit a draft financial plan covering the financial years 2016-17, 2017-18, and 2018-19, based on a number of planning assumptions, including the running cost reduction.

As part of these assumptions, the region’s CCGs have also been asked to plan for lower revenue growth, according to documents presented to Coventry and Rugby CCG’s governing body meeting this week.

The documents said: “At this stage, Midlands and East CCGs are advised to plan for lower revenue growth than previous NHS England indicative allocations suggested… It is not clear whether this is to offset an anticipated transfer of health funding to local authorities.

“In line with previous national guidance, Midlands and East CCGs are being advised to continue to plan to maintain a 1 per cent surplus, to hold a minimum 0.5 per cent general contingency reserve and to ensure that 1 per cent of their allocation is recurrently non-committed.

“CCGs are also being advised to plan to a 5 per cent year on year reduction in their running costs allocation.”

A Coventry and Rugby CCG spokesman said the advice did not represent NHS England policy, but was an early set of indicative assumptions.

The area team’s advice comes ahead of the publication of the government’s spending review on 25 November.

CCG running cost allowances were reduced by 10 per cent in 2015-16 compared to the previous year, in line with the government’s requirement that the Department of Health administration budget by cut by 10 per cent. 

Steve Kell, co-chair of NHS Clinical Commissioners, said: “To maintain CCGs’ long term stability, there must be no more cuts to their running costs allowances and they must have more flexibility in how they use them.

“Any further cuts to running costs at a time when CCGs are taking on more responsibilities through co-commissioning, is a significant risk for them as organisations and to their ambitions for more localism in the NHS.” 

An NHS England spokeswoman said: “NHS England is yet to issue any planning guidance to CCGs on these topics. Any such guidance is scheduled to be issued in December. Everything else at this stage will be local working assumptions”.