CCG budgets may slip in first year, warns watchdog

CCGs may struggle to hit financial targets in 2013/14 because of delays in defining their budgets and the loss of support from strategic health authorities, a financial watchdog has warned.

Budget: Audit Commission warns budgets may slip in first year of CCGs
Budget: Audit Commission warns budgets may slip in first year of CCGs

A report by the Audit Commission warns that the 'immediate challenge for CCGs is establishing their opening financial position'.

It points out that the DH and NHS England have faced 'considerable challenges' in trying to work out how to pull apart PCT budgets and transfer them to organisations set up under the government's NHS reforms.

A report by the Audit Commission points out that 'half of the CCGs authorised by NHS England have conditions outstanding which require them to improve in areas such as strategic financial planning, commissioning arrangements and financial management'.

'The DH, NHS England and legacy finance teams are working together to ensure that balances are identified and allocated appropriately. The delay may impact on CCGs’ ability to report accurately in the 2013/14 financial year and on their financial management arrangements,' the Audit Commission report warns.

It adds that strategic health authorities (SHAs), scrapped along with PCTs as part of the NHS reforms, played a key role in helping the NHS stay in budget.

'SHAs provided local leadership, were responsible for overseeing the performance of their local health economies and acted as the link between the DH and local NHS bodies. In this role they helped to redistribute financial resources to provide support to PCTs and NHS trusts.

'This may have been instrumental in reducing the number of bodies in breach of statutory financial targets in 2012/13.'

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