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Deficit of £700m predicted as two-thirds of CCGs end year in the red

Two-thirds of CCGs have predicted financial deficits, together amounting to £687m at the end of 2017/18. 

According to NHS England board papers, 125 CCGs will report a deficit at the end of this year, up from 95 CCGs at the end of February when NHS England estimated a shortfall of £719m.

The earlier estimate included a £291m shortfall predicted by CCGs and a further £428m predicted by NHS England.

The board papers said the latest forecast includes ‘mitigating actions of CCGs themselves and the additional intervention undertaken where necessary by NHS England regional teams’.

However, the papers added that ‘a sustainable solution to the underlying CCG deficit will be required, if financial balance is to be achieved next year, as the bulk of the central mitigations in 2017/18 are non-recurrent in nature’.

At the board meeting, Paul Baumann, NHS England’s chief financial officer, said CCGs had ‘struggled to constrain activity and operating costs’ in 2017/18, ‘despite record efficiency gains’.

He added: ‘We’ve explicitly dealt with the underlying deficit through the commissioner sustainability fund which we’ve introduced for 2018/19.

‘But also we’re determined to ensure by providing funding growth and then rigorously pressure testing the resulting CCG plans that activity planning for next year fully accounts for likely growth particularly in emergency activity so that we’re not faced with similar overspends as 18/19 unfolds.’ 

NHS England previously launched a £400m ‘commissioner sustainability fund’ to help CCGs that would still face a deficit even with the budget target set by NHS England.

CCGs have been asked to submit their final year-end financial reports by the end of April, with the final total deficit figure to be presented to the NHS England board in July.