FINANCE: A clinical commissioning group has warned that its deficit could hit an enormous £40m by the end of the financial year, which would be the largest recorded by any group so far.
Bedfordshire CCG’s chief operating officer John Rooke has also announced his departure - although a CCG spokeswoman told HSJ this was not related to the deficit.
The CCG started 2014-15 predicting a £4.9m surplus, and by November its forecast had deteriorated to a £24m deficit.
A report to its governing body this week revised the forecast down further, to a £28.1m deficit. However the CCG said the deficit may be “up to £40m”. Either figure would be the largest year-end deficit record by any CCG since they were created in April 2013.
The CCG blamed the deterioration on a difficult winter, increased hospital activity and a high number of expensive out of area placements for mental health service users.
A report to the board earlier this week said: “In addition, a root and branch investigation of our contracting and financial processes has revealed historical contracting issues.”
Former finance director James Corrigan stepped down in November and was replaced by an interim.
Of the group’s overspend at month 10 of this financial year, £5.6m was with private mental health providers.
Overspending with Luton and Dunstable Hospitals Foundation Trust and East and North Hertfordshire Trust was £4.5m and £2.5m respectively.
Bedfordshire CCG became embroiled in a dispute with Bedford Hospital Trust last year when the hospital refused to sign up as a subcontractor to Circle, which had been awarded a five year contract for musculoskeletal services.
The CCG’s board papers this week said it was owed money by Circle.
A CCG spokeswoman said the company had not yet reimbursed it some of the money it had already paid out to providers which had provided MSK care to Bedfordshire patients, but were not Circle subcontractors. She said the size of the sum was not known and that negotiations were ongoing.
Paul Hassan, chief accountable and clinical officer of the group, said in a statement: “I very much regret having to report this revised forecast, which is deeply disappointing to me. This is a very difficult time for the NHS in Bedfordshire. We must regain control of our finances if we are to maintain the strides we have made in the quality and safety of care available to local people.
“We are working with NHS England, which is appointing an external auditor to carry out a root cause investigation of our contracting and accounting processes. This will enable us to understand why we failed to identify these issues earlier and assess how we can further improve our systems.
“We have already taken actions to reinforce our internal controls including strengthening our management team and governing body. In addition we have developed a financial recovery plan that will be presented to our governing body for approval in April.”
Source
Board papers, CCG statements, information passed to HSJ
Source date
March 2015
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