CCGs' deficit forecast rockets by £180m

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CCGs now forecast a year-end deficit of £370m, compared to £190m forecast at the mid-year point
NHS England said the challenge of delivering higher levels of savings “is increasingly crystallising in individual CCG forecasts”
Spending within primary care and public health budgets forecast to be £70m less than planned

The projected overspend by clinical commissioning groups in England has almost doubled in the last three months, with a third now predicting in-year deficits.

After the first nine months of 2016-17, CCGs have forecast a year-end overspend of £370m, compared to £190m forecast after six months.

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There is a risk the outturn position of CCGs will be significantly worse than the forecast

In its quarter three finance paper, published today, NHS England said the challenge of delivering higher levels of savings “is increasingly crystallising in individual CCG forecasts”.

The year to date overspend of £437m suggests there is a risk that the outturn position of CCGs will be significantly worse than the forecast.

However, the continued deterioration of CCGs’ finances is again being offset by underspending in other areas of the NHS England budget.

Forecast spending in “other central budgets” is now £158m less than planned, while NHS England’s expected “central programme costs” are £180m less than planned. HSJ has asked NHS England to explain how these underspends will be delivered.

Spending within the primary care and public health budgets is forecast to be £70m less than planned, while the year to date overspend on specialised commissioning has also reduced.

The NHS England budget as a whole, which incorporates CCGs’ performance, is forecasting a £5m underspend. The budget is £61m overspent in the year to date.

The forecast does not include the £800m “risk reserve” CCGs have been forced to hold back to cover overspending in the provider sector.

Although the provider sector has planned for a deficit of £580m this year, experts have warned this position could worsen significantly by March.

The NHS England finance paper added: “It is our expectation that a substantial proportion of this (£800m risk reserve) funding will be required to offset overspends across the wider health system, and so will not be available to commissioners to spend.

“Including this reserve, the current forecast and risk assessment show that CCGs and NHS England are on course to balance their combined budget for 2016-17 as a whole, while contributing up to an £800m managed underspend sufficient to offset the planned £580m net deficit in the provider sector.”

The paper said there are 98 CCGs reporting year to date overspends, of which 60 are greater than 1 per cent of their allocation. There are 71 CCGs forecasting a year-end overspend. There is a 36 per cent forecast increase in the value of commissioner savings compared to 2015-16, it added.