A clinical commissioning group in the South West has warned it could be put in “turnaround” by NHS England if its “dire” financial situation is not rapidly improved.

Wiltshire CCG’s leaders wrote to member practices last week to inform them about a number of tough measures which the group is implementing to try to get its finances back on track.

Deborah Fielding, Wiltshire’s accountable officer, and Peter Jenkins, the chairman, said growth in demand for planned care and the increasing cost of primary care prescribing had created a “dire” financial situation for the CCG.

The CCG has notified NHS England that it will miss its financial target by £4.8m in 2015-16, forecasting a surplus of only £0.7m for the year, and that it expects to have a funding gap of about £23m in 2016-17.

This had led to a request by NHS England for the CCG to draw up a financial recovery plan setting out how it will improve its in year position as well as “recovery actions to ensure financial sustainability in 2016-17 and 2017-18”.

The CCG’s letter states that it has two months to show it is delivering the plan and that the “seriousness of the situation cannot be overstated”.

It continues: “Failure to achieve the financial recovery will result in placing our CCG into ‘turnaround’, including external intervention into our local health system in order to recover the financial position.

“Very simply, Wiltshire CCG cannot continue to fund the excess demand that is being experienced. Our system is over trading and it will have to shrink in order to fit within the financial envelope we receive.”

According to the letter, the CCG has capped the amount of planned care it purchases from hospitals and increased the number of procedures it will no longer fund.

It is considering “pre-referral clinics” to check “whether a patient really needs acute care intervention”.

Other saving initiatives include “investigating… options for rebates” from the pharmaceutical industry for drugs spending, and enforcing contractual terms “more stringently”.

The letter concludes by saying: “Failure to respond to these intentions will result in difficult and prolonged financial decisions and contractual negotiations for 2016-17 as well as threatening the sustainability of existing services.”

A spokesman for NHS England South, said: “Following a reduction in the CCG’s planned financial outturn, NHS England South… requested a financial recovery plan from Wiltshire CCG.  

“We have received a draft plan which we are currently reviewing  and we will feedback our comments to the CCG. We continue to support the CCG in developing and delivering upon these plans.”