CCG budget allocations delayed until February

The indicative budgets were originally intended to be published before the end of 2011, following the late November release of the NHS operating framework for 2012-13.

However, the DH delayed the release to January, and has now confirmed to HSJ that CCGs will not be told their allocations until February.

The department will release an analysis of CCGs’ “base line spend” in the next few weeks. Full allocations for 2012-13 are expected to follow before the end of February.

HSJ understands that the delay is down to the complexity of drawing up a system which does not result in major winners and losers. Applying a new funding formula could lead to significant rises or falls in the amount that is allocated to an area next year compared to 2011-12.

To mitigate this, the final formula will incorporate a “smoothing” mechanism to avoid dramatic changes in allocations.

In a webchat hosted by the NHS Institute for Innovation and Excellence on 9 January, the DH’s managing director for commissioning development Dame Barbara Hakin said designing the new formula was proving to be “an incredibly difficult and complex job”.

However, at that stage the allocations were still due to be announced before the end of January.

Dame Barbara said the NHS’s flat funding settlement would make it difficult to move money to under-resourced places without taking money away from other areas, which would lead to “enormous” damage to services.

The DH’s normal means of correcting funding levels was to use a “rising tide” of annual funding increases, favouring historically under-resourced areas. However, she said: “At a time when we are not expecting any indicative growth at all it would be unlikely that there will be an ability to move people towards target.”