The NHS commissioning system is forecast to miss its target surplus by £184m in 2014-15, with much of the overspend attributed to the spiralling cost of the cancer drugs fund.
A finance report that will go to NHS England’s board meeting this week states that commissioners across England are forecasting a cumulative surplus of £283m against a planned surplus of £467m.
This would represent a reduction by two thirds of the £867m surplus that the commissioning system retained in 2013-14.
The report adds that commissioners have identified measures to reduce spending, but these still leave a “risk adjusted” forecast overspend against plan of £122m.
An NHS England spokeswoman told HSJ it was working on “further mitigations” and expected those to be sufficient to close the remaining gap.
The forecast is driven principally by pressure on NHS England’s specialised commissioning budget, which is expected to be £167m in the red this year.
The report states that “more than half of the overspend so far this year relates to the cancer drugs fund”.
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Figures released to HSJ under the Freedom of Information Act show that nearly two thirds of the £66m specialised commissioning deficit recorded in the first half of 2014-15 was due to cancer drusg fund overspending.
By the end of September, NHS England had spent £180m on drugs paid for through the fund, against an allocation of £140m for that period. In 2013-14 the £200m fund was overspent by £30m.
Critics of the fund, which was launched by the coalition in 2010, argue that it reduces the incentives for drug manufacturers to cut prices.
The £184m projected overspend for the commissioning system overall is small relative to its £98bn budget.
However, any shortfall could be significant this year, because the health service overall is at risk of tipping into deficit.
NHS England chief financial officer Paul Baumann last week told MPs that the latest forecast for the NHS provider sector was a deficit of around £500m.
NHS England’s planned £467m surplus would not quite be enough to offset such a deficit and would need an underspend in the Department of Health’s centrally held budget to keep the system overall in the black.
Mr Baumann told the Commons health committee “the total vote is delicately poised between being in balance and not quite in balance” in 2014-15.
NHS England’s finance report states that it is looking for “additional measures to close the remaining £122m gap” in its forecast, with a focus on “further reductions” in its administration and central programme budgets.
An NHS England spokeswoman added: “We expect [these options] to be sufficient to enable us to achieve our financial objectives, ending the year with a cumulative surplus of £467m.”