CCG efficiency targets rise sharply as financial squeeze spreads

CCG quality, innovation, productivity and prevention targets, published by NHS England, show that commissioners are aiming to save £1.8bn this financial year through their efficiency plans – an increase of 28 per cent on last year.

The data also shows the CCGs with the biggest QIPP challenges this year have targets to save more than 6 per cent of their annual funding allocation. In 2014-15, the largest QIPP targets were less than 5 per cent of allocation.

The average QIPP target has also risen, from less than 2 per cent of allocation to 2.3 per cent.

QIPP targets are calculated by CCGs and agreed with NHS England at the beginning of the financial year. They are based on the difference between the CCG’s funding for the year and the projected growth in demand for services.

CCGs with the largest QIPP target as a proportion of their allocation

CCGs whose QIPP plans have increased the most

Many of the CCGs with the biggest QIPP challenges are attempting to improve their financial position after finishing 2014-15 in deficit.

A spokesman for Guildford and Waverley CCG said its QIPP target, which is the largest in the country, had resulted from an underlying deficit which emerged amid a growth in demand for services in 2014-15. They expected 75 per cent of this year’s savings to be delivered recurrently, he said.

South Gloucestershire’s target also related to a budget deficit, and had been agreed with NHS England as part of a five year turnaround plan. It expects only 60 per cent of this year’s savings to be recurrent.

North Tyneside and North Hampshire also have tough QIPP targets as a result of an underlying deficit.

Anita Charlesworth, chief economist at the Health Foundation, linked the growth in CCG QIPP targets to wider financial pressures in the NHS. She said: “In 2015-16 the NHS faces an affordability gap – the difference between pressures and funding – of over 6 per cent… As a result CCGs are looking for larger QIPP savings to balance their books.

“But the deliverability of these savings is really open to question – many rely on reductions in hospital activity but it is not clear whether service changes, including new models of care, will be able to effectively manage demand.”

Paul Briddock, director of policy at the Healthcare Financial Management Association, added: “The current strain on NHS finances is making conditions increasingly challenging for all types of organisations. It’s these pressures which have resulted in QIPP targets rising sharply this year. While the CCG sector is generally thought to be faring better than the provider sector… CCGs are experiencing the same pressures as throughout the whole of the NHS, and high levels of savings are being asked of them.”

He said although QIPP targets were based on credible projections and data, it was “hard to envisage how a QIPP target of 6 per cent would be achieved”. He added that those that miss their targets will “inevitably” go into deficit.