There is wide regional variation in the financial health of the NHS, HSJ analysis of the performance of clinical commissioning groups, providers and specialised commissioners in 2014-15 reveals.
- Midlands and East by far the most troubled region, while North generated large surplus
- CCGs report total surplus of £731m, although experts warn much of this is non-recurrent
- “Real danger” that, overall, the NHS will finish in deficit this year
The analysis gives the most comprehensive breakdown of the service’s financial difficulties to date.
The Midlands and East is by far the most troubled region, while the North is generating relatively large surpluses.
A report released by NHS England earlier this month shows the CCG sector reported a total surplus of £731m in 2014-15.
Almost half of this was reported by groups in the North, while groups in the Midlands and East had a joint surplus of just £48m. There was also a large surplus in London, of £236m, while the South had a surplus of £83m.
A large proportion of these totals is likely to be non-recurrent, however, as they include accumulated surpluses from primary care trusts, as well as other provisions.
As previously reported, the NHS provider sector ended the year with a total deficit of £822m, with foundation trusts overspending their budgets for the first time. The Midlands and East accounted for more than half of this figure.
Meanwhile, the NHS England report showed specialised commissioning budgets were £214m overspent.
When HSJ combined the positions of CCGs, providers and specialised commissioners, the North had an overall surplus of £279m, compared with a £418m deficit in the Midlands and East. London’s deficit was £14m, while the South had a deficit of £57m.
When centrally held budgets were also factored in, such as quality premiums and the cancer drugs fund, there was a joint national deficit of £191m.
However, John Appleby, chief economist at the King’s Fund, told HSJ the CCG surpluses are likely to be non-recurrent, so they cannot balance the huge provider deficits. Given that provider deficits are predicted to more than double this year, he added: “There’s a real danger of an overall departmental deficit for the Department of Health in 2015-16.”
The underspend against CCG plans, of £151m, is perhaps a better indicator of recurrent surpluses that could offset deficits in the provider sector, he said.
Even this position “benefited from significant one-off items” such as reassessments of spending against continuing healthcare claims, the NHS England report said.
It added: “Excluding these items, there was a small net overspend within the CCG sector.”
Anita Charlesworth, chief economist at the Health Foundation, said: “Where the NHS will go to balance its budget for this year is difficult to see. It comes out again and again that the Midlands is struggling and the North is doing OK, but overall we’re seeing financial problems becoming systemic rather than concentrated.”
NHS England finished 2014-15 with an outturn surplus of £786m, before technical adjustments. This figure includes a £420m surplus for primary care budgets, and did not include the performance of provider trusts. The Department of Health has not yet published its accounts for 2014-15.
A spokesman for NHS England said it was “fully aware” of the financial position in the Midlands and East, which had the “largest number of CCGs with below-target levels of funding”.
He said about £100m of extra funding was targeted at almost half the region’s 61 CCGs in 2015-16, specifically to bring them closer to their target allocation, and this policy would be continued next year.
The spokesman added: “In addition, NHS England is currently developing a financial resilience programme that will proactively support CCGs, and much of this work is being piloted in the Midlands and East region.”
Monitor and the NHS Trust Development Authority said in a joint statement: “Long term planning processes and national programmes are looking in-depth at financial recovery and how health systems can work together to become sustainable for the future and protect services for patients.”
- Department of Health and Social Care (DHSC)
- East Midlands
- East of England
- King's Fund
- Midlands and East Regional Team
- NHS England (Commissioning Board)
- NHS Trust Development Authority
- North of England Regional Team
- North West
- Specialised commissioning
- West Midlands
- Yorkshire and the Humber