Call for £1.3bn CCG funding handover

In recent years the Department of Health has removed 2 per cent of primary care trusts’ budgets. It has been held by strategic health authorities which have used large sums to fund shortfalls in struggling areas.

In November last year, the operating framework 2012-13 indicated a similar policy would continue after 2013, despite PCTs and SHAs being replaced by more autonomous CCGs.

The framework said a scheme involving “recurring funds that are only committed on non-recurrent expenditure” would “continue into the new health system to underpin continued financial control”.

But HSJ understands there is now disagreement in the commissioning board - which will decide CCGs’ budgets and planning framework - about whether the requirement will apply next year.

A senior source close to the decision indicated the Health Act contained no provision for the board to “topslice” funds from CCG allocations and hold them itself.

However, the source said the board could simply allocate a sum - which would otherwise have been in CCG budgets - to itself to create an alternative contingency fund. This would risk breaching the government’s commitment to a real terms annual rise in the allocation for each local area.

Alternatively the board could “direct” CCGs to treat some of their income as non-recurrent, although this may not help in bailing out other areas.

Several PCT cluster finance directors said it had been indicated at a meeting involving the board’s finance director Paul Baumann last month that the 2 per cent - which will amount to around £1.3bn for CCG budgets - may not be removed next year.

One cluster finance director told HSJ the uncertainty made it difficult to make plans for next year and to design local and regional contingency funds between CCGs.

NHS Confederation deputy chief executive David Stout said: “CCGs are unlikely to want to see their money topsliced before they even get it. The board should be pretty cautious.”

The finance director of a large hospital trust said: “With reductions in funding for education and training, and pressure on providers from the tariff and elsewhere, it is vitally important [commissioners] receive 100 per cent of funds voted for healthcare.”

Mr Baumann said in a statement: “CCG financial policy is being developed in partnership with CCGs… as such no decisions have yet been made.

“However, the ongoing intention to secure funds for non-recurrent expenditure is recognised by all involved as important to retaining flexibility and mitigating financial risk.”