• Shropshire CCG reports £12.2m deterioration from plan in first four months of the year
  • Legacy debts and acute provider overspends are largest cost pressures
  • CCG faces a year-end deficit of £31m if it fails to make sufficient savings

Shropshire Clinical Commissioning Group is facing a potential £31m deficit unless it takes urgent action after already recording an £18m deficit by July.

The CCG was the first to be put in special measures by NHS England last year, and has been judged inadequate and given formal directions by NHS England to try to arrest its financial decline.

At a meeting of its governing body earlier this month, it emerged the CCG’s position had deteriorated substantially with an £18m deficit at month four, a deterioration of £12.2m from a planned deficit of £5.8m.

For 2016-17 the CCG has a QIPP savings target of £216m – the equivalent of 5 per cent of turnover – and in order to meet its control total it needs to make an extra £12m of savings.

In August, the CCG said it was planning £3.6m of additional savings, meaning in one month the required savings increased by a factor of four.

Key issues affecting the CCG’s finances include acute provider overspends above plan, which is the largest cost pressure at £6.9m. It also has £5.2m of non-recurrent legacy debts.

If the CCG does nothing it faces reporting a year-end deficit of £31m.

A summary of the August meeting said: “We continue to spend at a rate that is far in excess of what is required to meet our control total. Andrew Nash [chief financial officer] said there is a need to take radical action and ‘think the unthinkable’.”

Former accountable officer Caron Morton resigned in November and was replaced by David Evans, accountable officer for neighbouring Telford and Wrekin CCG, which is planning to deliver its 1 per cent surplus this year.

Mr Evans told HSJ: “There have been some legacy issues that we have still be uncovering in Shropshire and we have not made as much progress as we would have liked and there is further work to do there.

“We have seen demand rise above plan and we are working with our membership to move back closer to plan. We will have a difficult year but we are aiming to meet our control total but it is a significant challenge.”

Special measures CCG must 'think the unthinkable' to avoid £31m deficit