Precarious CCG finances could threaten new models of care

CCGs are operating at close to their financial limit and risk being unable to invest in new models of care unless the government's spending review delivers extra investment, NHS financial experts have warned.

A report on health service finances highlights NHS England data showing that CCGs are forecasting a combined underspend for 2015/16 of just £2m, compared with a £151m underspend in 2014/15.

CCGs plan to spend £71.8bn in 2015/16, around £400m of which has been drawn down from previous years' surpluses, the latest Healthcare Financial Management Association (HFMA) NHS financial temperature check report says. Without this extra cash, 'the CCG sector would report an in-year deficit', it adds.

HFMA policy director Paul Briddock told GPonline that CCGs were now spending right up to their 'financial limits'.

NHS funding

The report found that 48% of CCG finance directors said their 2015/16 spending plans would eat into brought-forward surpluses from previous years.

A total of 56% of CCG finance directors said their organisation's year-end financial position would be worse for 2015/16 than it was in 2014/15.

Nearly four out of five said acute sector contracts had cost more than expected, 60% said prescribing costs had exceeded forecasts and just over half said they had underachieved on savings plans.

More than 80% of CCG finance directors said organisations in their area did not have sufficient funding available to implement NHS England's Five Year Forward View plans, and more than 85% were not very or not at all confident that their organisation could deliver the 2% to 3% efficiency savings required to save £22bn across the NHS by 2020.

Spending review

Mr Briddock called for the government to use the spending review next week to 'front-load' an extra £8bn in health service funding demanded by NHS England.

'The financial situation is looking very difficult for the NHS even if it gets the extra £8bn,' he said, highlighing 'increasing scepticism' over the health services' prospects of achieving its £22bn savings target.

'The £22bn is looking increasingly difficult to find. It is inherent within the plans for new models of care that you need to invest in them. We are calling for the £8bn to be front-loaded, within the next 18 months to start investing in new models of care.'

Without extra funding, he warned, with their cash reserves eroded CCGs would be unable in coming years to find vital pump priming cash to support new ways of working and transfer of services out of hospitals into community settings.

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