• Cambridgeshire and Peterborough CCG control total revised from £3m to £17.4m deficit
  • CCG will “probably” be ordered to raid reserves by NHS England to improve position at end of 2016-17
  • CCG says it faces “most significant” financial challenge since its inception

The financial position of one of the NHS’s largest clinical commissioning groups has deteriorated sharply, prompting its control total to be revised from a £3m deficit to a £17.4m deficit for 2016-17.

Cambridgeshire and Peterborough CCG’s December finance report said it had agreed a 17.4m control total, but “it was probable” NHS England would order it to raid its reserves later in the year to improve its year-end position.

Peterborough_City_Hospital

Peterborough_City_Hospital

The CCG said the deterioration was ‘largely due to overspends on acute contracts’

The board papers included minutes from the CCG’s October finance meeting, in which the revised control total was discussed. The minutes said the CCG “recognised” that even hitting the adjusted control total would be a “significant challenge”, while the December paper said the CCG was facing its “most significant” financial challenge since it was established.

The news follows NHS England revealing this week that the forecast overspend for all CCGs had increased by almost £70m in a last month. The year to date overspend is £293m as of month seven, compared to £236m the previous month. The projected outturn for CCGs at the end of the year is £256m.

The CCG’s December finance report said: “It is probable that NHS England will require the CCG as a technical adjustment to release [some of the CCG’s reserves] into our position at month 12; this will improve our reported position by £9.9m to a deficit of £7.5m. If this happens then NHS England will also adjust our control total accordingly.”

The reserve is the 1 per cent of non-recurrent reserve CCGs are required to hold, the use of which is determined by NHS England, the paper said. The CCG told HSJ in a statement that the technical adjustment would have “no impact on the CCG’s underlying financial position” because ”it has never planned to utilise these reserves, nor to carry them into future years”.

The CCG said the deterioration in its position was “largely due to overspends on acute contracts, driven by increases in elective and day case activity”.

To achieve the revised control total the CCG needs to deliver £45.2m of QIPP savings – 4.5 per cent of its overall expenditure. This was “a level of financial improvement significantly beyond anything delivered by the CCG in prior years, but considered achievable (albeit with inevitable risks),” the paper said.

It continued: “It is clear that the financial challenge that the CCG faces is the most significant since its inception. This reflects the culmination of a number of years where the underlying financial pressure has been increasing and not successfully addressed through QIPP delivery.

“The governing body is asked to note the financial position at month seven, the risks associated with the year-end forecast and the actions being taken to address these and mitigate the tough financial outlook.”

NHS England’s latest finance report, published this week, showed Cambridgeshire and Peterborough is one of 93 CCGs reporting year to date overspends.

The report, by chief finance officer Paul Baumann, said: “There are 93 CCGs reporting year to date overspends, of which 53 are greater than 1 per cent. Roughly half of these CCGs are assuming that they will be able to recover their financial position by the end of the year…

“All CCGs facing potential overspends are fully engaged in mitigating actions, with additional intervention where necessary by NHS England regional teams.”

This story was updated on 16 Dec at 10:40am: 

This was to reflect the CCG’s view that the technical adjustment would have “no impact on the CCG’s underlying financial position” because ”it has never planned to utilise these reserves, nor to carry them into future years”.

The CCG’s chief finance officer Jonathan Dunk’s full statement said: “With regard to our year end position, there is an expectation that the 1 per cent budget reserve, which all CCG’s are required to hold uncommitted, will be released into the financial position at Month 12.

”This is a purely technical adjustment that would improve the financial deficit position to £7.5m. The CCG has never planned to utilise these reserves, nor to carry them into future years, so this has no impact on the CCG’s underlying financial position.”