• NHS England told CCGs they must reduce admin budgets by 20 per cent 
  • Cuts designed to save £320m a year nationally
  • “Administration” limits to be introduced for each CCG in the next financial year

Clinical commissioning groups will have their administration budgets cut by 20 per cent in a push to save money and spread integrated care systems.

A letter sent to all CCGs from NHS England said the cuts will save “more than £320m a year compared to 2017-18 and will be reinvested in improving patient care and supporting transformation of services”.

CCGs must make the full recurrent savings by 2020-21. The letter added each CCG will have “administration limits” placed on it for the next financial year, with new ”resource allocations” for each one issued next month.

The letter from Matthew Swindells, deputy chief executive at NHS England, and regional directors, said CCGs can save money by “exploring mergers and joint ways of working”.

To support this, it said it will now approve mergers throughout the year rather than once a year, as is currently the case. It said: “[It] will particularly support approaches which align a single CCG with a single ICS.”

Its stops short of telling CCGs to merge - something some people have called for.

HSJ has previously reported that 58 per cent of CCGs now share an accountable officer with at least one other CCG. However, there is wide variation between commissioners, with some accountable officers overseeing populations of over 2 million across eight CCGs and others looking after populations of less than 250,000 in a single CCG.

The letter also confirmed the new regional NHS England structure will support the development of ICS and sustainability and transformation partnerships with “resource… focused on those areas most in need”.

Some people have called for CCG mergers to be mandated. But the letter suggested NHS England has decided against this, stating CCGs will have the “flexibility locally to determine how these efficiencies can be delivered”.

However, NHS England did “suggest” ways of saving the cash, including:

  • Significantly reducing spend on external consultants;
  • Working with commissioning support units to cut costs, but it also said the CCGs must simplify payments to CSUs and move away from payment by results, and CSUs must cut their admin budgets by 20 per cent as well; and
  • Closer working with other organisations in a CCG’s health economy, which NHS England will support through a “review of payment systems and streamlining of other business processes”.

The letter was issued to all CCGs last week ahead of the release of the long-term plan, which is due in December.

Julie Wood, chief executive and NHS Clinical Commissioners, said: “It will be critical that these cuts to running costs don’t undermine the efforts happening across the system to transform health and care services for the better.

“NHSCC will be working with NHS England and supporting our members as they take steps to achieve this reduction in 2019-20.”