- Redditch and Bromsgrove CCG initiates financial recovery process
- Commissioner fears it will not meet planned 1 per cent year-end surplus
FINANCE: Redditch and Bromsgrove Clinical Commissioning Group has entered financial recovery following a deterioration in its financial position, threatening its plans to end the year with a £2.3m surplus.
The West Midlands group’s financial position has been hit by increased pressures on its contract with its main acute provider, with increased spending on independent sector providers to deliver referral to treatment targets.
A CCG enters into financial recovery when it needs to bring its spending back in line with its annual plan, a process which is usually agreed with NHS England.
Redditch and Bromsgrove reported an in-year overspend of £454,000 in October against a planned surplus at this stage in the year of £1.2m, according to documents to be presented to the CCG’s governing body this week.
The CCG attributes difficulties in delivering its previously agreed plan to deliver a 1 per cent surplus in 2015-16 from an annual allocation of £197m to:
- Over-performance in outpatient care by Worcestershire Acute Hospitals Trust;
- increased prescribing costs;
- increased use of the private sector to deliver elective care; and
- non-delivery of quality, innovation, productivity and prevention targets.
The documents said: “The financial recovery plan sets out the key pressures emerging in the financial position as over performance in the acute contract, specifically in first outpatients, follow ups and cost of admissions, increased use of the independent sector to deliver referral to treatment, continuing healthcare [claims] and prescribing.
“These pressures coupled with non-delivery of QIPP schemes to date meant that it became apparent in month six that the CCG contingency of 0.5 per cent (£0.98m) would not be sufficient to mitigate the forecast overspend at year end.”
Redditch and Bromsgrove CCG chief financial officer Paul Sheldon said: “The CCG has drafted a financial recovery plan, in order to deliver the planned surplus for 2015-16.
“Financial recovery is initiated where a CCG needs to take action to bring spend back in line with the plan and this is usually agreed with NHS England.”
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CCG board papers and information provided to HSJ
20 November 2015