A major Department of Health-led review of commissioning budgets has highlighted the uncertainty and significant risks involved in financial planning for next year.
The DH and NHS Commissioning Board have asked primary care trust clusters to report details of spending in their area in 2011-12 and plans for 2012-13. The “baseline exercise” is designed to calculate budgets for 2013-14, when each PCT’s funds will be split between at least one clinical commissioning group and local authority, as well as the board and Public Health England.
Results - due to be returned to the DH this week - had to be signed off by clusters and CCG leaders, and checked by strategic health authority clusters in an attempt to prevent errors, disagreement and gaming.
DH guidance on the exercise, seen by HSJ, highlight both the risk of mismatching the new bodies’ budgets to their likely costs, and uncertainty in planning for next year.
It comes in a letter to commissioners from DH chief financial controller Janet Perry and the commissioning board programme director for finance. It says: “In the existing system, the resources are allocated to the 10 SHAs and 151 PCTs… In the new system, there are more commissioners, and the mapping of responsibilities between the old and the new bodies is not straightforward.
“It has yet to be decided how these figures will be used to determine allocations in 2013-14… however, this collection will inform these so it is vitally important the information collected is as consistent and as accurate as possible, and is ‘owned’ by CCGs as well as PCTs.”
It acknowledges there are “a number of complications in the collection and analysis of these figures”.
The DH guidance shows these complications include local authority public health allocations, which it says will “not fall in real terms” from indicative budgets published earlier this year. That suggests they could get larger allocations than currently expected (see right). HSJ understands some councils have pressed to be involved in the baseline work in their area, with the aim of looking after their own financial interests.
The division of costs of property and maintenance - most of which will pass to the newly created NHS Property Services Limited next year - adds significant complexity, one finance source said.
Another source said the difficulty of dividing costs between CCGs where there was more than one in a PCT area was the issue that was most likely to spark dispute.
The exercise asks commissioners to identify non-recurrent income, contingency spend and to “deduct” funds from their previous years’ surpluses. A finance source working with a CCG in the south of England said it raised the question of “whether [the board] will take [these funds] off the CCG and use it centrally for some form of contingency”.
Neither the DH nor commissioning board have yet said when they will publish allocations for next year. Nor have they said how closely they will be based on the baselines, rather than a formula reflecting population needs.
Although allocations for the following year are not normally published until the autumn, they are usually much easier to predict, and PCTs generally begin planning in July.
One finance source in the north of England said: “We are making quite a lot of assumptions, one being we will get something similar [in funds] to what the baseline exercise says we need. Of course if we don’t, that could create some big swings, which we haven’t allowed for.”
Another commissioning finance source said: “There is huge risk.”
HSJ understands the commissioning board plans to publish details about the 2013-14 planning framework, although not necessarily allocations, in October.