This site is intended for health professionals only

Budgetary uncertainty, doubts over CCG plans and 10,000 redundancies: NAO report picks apart ‘challenging’ 1 April transition

The National Audit Office has catalogued a series of failures in managing the transition to the new NHS structure on 1 April, including a lack of staffing and uncertainty around CCG budgets – and has also expressed doubt over whether CCGs will be able to make necessary efficiency savings.

The independent watchdog’s report, Managing the transition to the reformed health system, found that NHS England had failed to fill more than one in ten positions by 1 April 2013, when it took charge of overseeing the health system in England. This was despite the NHS having made just over 10,000 full-time-equivalent staff redundant in the three years leading up to 31 March 2013, at a total estimated cost of £435m – an average of £43,095 per person.

The auditors said that CCGs’ budget allocations for 2013/14 were based on PCT data which ‘may not reflect previous spending patterns as closely as intended’, and found NHS England was still adjusting CCG budgets after 1 April. This caused commissioning groups particular problems in committing and planning resources, which had the knock-on effect of causing problems at hospital trusts, they said.

There is also some doubt over whether CCGs will be able to maintain financial balance, the report said: ‘The number of CCGs that lacked detailed, credible plans raises concerns that they will not be well placed to make the necessary efficiency savings.’

The findings over staffing problems come as GPs are reporting they are not being paid money due to them because of problems with staffing levels at NHS England’s local area teams. Last month, Pulse reported that practices have been denied payments which resulted in some being issued with court summons threatening to take their properties away.

However, the NAO found that NHS England actually focused on recruitment for its local area teams. It said: ‘NHS England had an overall vacancy rate of 11%, but the unfilled posts were not spread evenly across the organisation. NHS England prioritised recruitment to its regional and local teams and vacancies were concentrated in back-office functions. Seventy-five percent of posts in its national support centre were filled, with the lowest rate in the policy directorate.’

Across the NHS, more than 10,000 full-time equivalent posts were made redundant in the three years before 31 March 2013.  According to Department of Health estimates around 2,200 staff were then re-employed by the NHS, with the NHS only able to reclaim redundancy payments if a member of staff rejoined within four weeks of leaving. Some 44 board level managers in SHAs and PCTs were made redundant at an average of £277,273.

The NAO also found there were a number of problems with CCG budgets. It said: ‘CCGs… were notified NAO of their budget allocations for 2013-14 in December 2012.’

‘However, ongoing adjustments meant that the budgets for clinical commissioning groups had not been finalised at the time of our work, hampering their ability to plan and budget. Good financial management is particularly important given the financial challenges facing the NHS.’

PCTs had to make assumptions about certain spending, as data wasn’t available at GP practice level, it added: ‘NHS England and the Department recognise that this will have affected the accuracy of the data and therefore the extent to which the budget allocations for 2013-14 reflect previous spending patterns.’

Amyas Morse, head of the National Audit Office, said: ‘It is a considerable achievement that the new organisations were ready to start work on time. This could not have been accomplished without the commitment and effort of many NHS staff. However much needs to be done to complete the transition.’

‘Some parts of the system were less ready than others, and each organisation now needs to reach a stable footing. This will be particularly challenging at a time when the NHS is having to make significant efficiency savings. The reformed health system is complex and the Department, NHS England and Public Health England must take a lead in helping to knit together the various components’

Dr Mark Porter, BMA chair, said: ‘The findings of the National Audit Office echo many of the BMA’s concerns about how the NHS reforms were devised and implemented. Introducing radical changes to how the NHS is run and structured during a period of intense financial pressure has been a costly distraction to solving the real challenges facing the health service. To learn that some of the newly created organisations already face financial uncertainty is extremely worrying, particularly as they are still expected to make financial savings in the months, and potentially years, ahead.’

‘All the evidence is pointing to a worsening financial situation for the NHS and the Government needs to urgently rethink its approach. Most of the savings have come from pay freezes and cuts in the tariffs for services but this is neither sustainable or likely to deliver the long term savings that are needed to protect patient services.’