About a quarter of clinical commissioning groups are facing “real difficulty “ in “making ends meet” this financial year, the NHS England finance director has said.
Paul Baumann was speaking at the Commissioning conference in London on Wednesday.
He set out NHS England’s requirement for all CCGs that they make a surplus of at least 1 per cent, spend at least 2 per cent of their budget non-recurrently, and hold a contingency reserve of at least 0.5 per cent.
Mr Baumann said: “The latest [CCG] plans, submitted in May, show the CCG sector as a whole is broadly meeting these aspirations.
“But, more troublingly, about a quarter of CCGs are having real difficulty making ends meet, with little or no reserves to fall back on.
“In quite a number of cases [there is] also a significant underlying deficit to deal with. There’s plenty of risk in that context that a number of them will tip into the red, if ambitious [efficiency] and activity reduction plans aren’t delivered, or if [there are] problems in the wider health economy for which they are responsible.”
Mr Baumann said overcoming those problems would require a significant effort.
He also highlighted the importance of commissioners sharing risk.
He said: “Many organisations will conclude they need to arrange some form of risk sharing, alongside [their own] ability to forecast the icebergs as we go along.”
The former NHS London finance director said there was not “one right answer” to risk sharing arrangements.
He said: “We’re certainly not proposing to organise this centrally. We’ve seen approaches between [different] CCGs, and between NHS England and CCGs, ranging from relatively narrow collaboration on specific initiatives and full risk pooling for major services contracts.
“I would commend to you all of those things.”
Mr Baumann was pressed on the confusion and errors in 2013-14 commissioning allocations, particularly due to uncertainty about the split of specialised services responsibility between NHS England and CCGs.
In recent months CCGs have complained about being informed at short notice that their 2013-14 budgets are smaller than they had expected, or that they were responsible for services they had not anticipated. However, there have also been transfers in the opposite direction, from NHS England to CCGs.
Mr Baumann said these issues came about due to the complexity of disaggregating primary care trusts’ budgets. He added: “It is massively complex and frankly we’ve all been surprised [at] the difficulty of getting that tied down.
“The key point is it’s a shared problem. This has not been dumped on one side of the CCG/NHS England divide.”
He said commissioners had to “work as quickly as we can” to move funding to “the right place to match the expenditure as we think it’s going to fall”.
Mr Baumann said: “We’re making quick progress, though we’re still some way off.”
He said: “I’m absolutely committed to ensuring this doesn’t become a thing which ruins individual [organisations’] plans or leaves us with major difficulties in 2013-14, but it is a big challenge.
“The one reassuring thing is we haven’t suddenly invented whole set of patients or treatments [which would require additional funding in the NHS overall], so the totality of this ought to be self-financing.”