Exclusive: NHS England 'told CCG to report £41m deficit as £5m'

Northumberland CCG was one of 26 rated as “inadequate” by NHS England in July and placed under legal directions in September last year, primarily due to its worsening finances.

The CCG is the main commissioner for the “accountable care organisation” being spearheaded by Northumbria Healthcare Foundation Trust.

But governing body papers from this month reveal that while the CCG was officially forecasting a £5m deficit for 2016-17 up until December, it is now forecasting to end the year with a deficit of £41m.

Minutes of the audit committee included in the 15 February governing body meeting also suggest NHS England had asked the trust to not report the deterioration.

The report said: “There was discussion regarding the continued formal reporting of a £5million deficit when the actual position is £41million.

“The CCG has repeatedly discussed the actual financial position with NHS England but has been asked to continue to report the deficit as £5million.”

A deficit of £41m would run contrary to the CCG’s legal directions, which state the organisation must ensure an in-year deficit of no more than £5m, based on it maintaining a balanced in-year position while not paying off the £5m deficit it carried over from 2015-16.

Board papers show the CCG was officially forecasting a deficit of £5m up until December.

In a statement the CCG said meeting its statutory duty to balance its books was a “key priority”, and that the spiralling deficit was partially due to pressures in the acute sector.

The statement added: “The period of comprehensive financial due diligence has resulted in a potential financial risk to the CCG of £41m being identified.

“NHS England continues to work closely with the CCG, in an open and transparent way, to ensure delivery of the CCG’s statutory duty to manage within its financial resource and to support in the mitigation of any financial risk.”

An NHS England spokesman said: “If a CCG is contemplating deteriorating its financial outlook, we need to have a clear and shared understanding of the reasons for that and the action that is being taken to mitigate the problem, before a budget movement is ‘baked in’ to a valid forecast.”

Northumberland CCG is the primary commissioner for the Northumbria accountable care organisation, under which Northumbria Healthcare will hold a single contract for acute, mental health and community services, and adult social care.

The ACO was due to go live in April but HSJ revealed last week it has now been indefinitely delayed.

Northumberland CCG’s board papers said the CCG requires written confirmation from NHS England that its financial position will not impact on its ability to “become part of” the ACO, but the national body has not made a decision yet.

The CCG said its “firm intent” was to deliver the ACO alongside Northumbria FT and added: “To ensure that the system is fully prepared for an ACO ‘go live’ the CCG and the trust will, from 1 April, 2017, enter a comprehensive period of transition to ensure strong financial management and appropriate future governance and commissioning arrangements.”

HSJ revealed earlier this year how Northumberland County Council chief executive Steven Mason has been made accountable officer of the CCG. The council’s adult and community care services director Vanessa Bainbridge has also been appointed the CCG’s chief operating officer, with both executives holding cross-organisational roles.