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CCGs’ strong financial performance at risk

Managers warn worsening NHS financial position will spread to CCGs

Adrian O'Dowd

Monday, 10 November 2014

The healthy financial performance of GP-led CCGs in their early years could start to fail soon as the NHS’s finances overall are likely to worsen, according to managers.

The NHS Confederation, which represents most NHS organisations, has warned that NHS finances are likely to get worse and the fortunes of the, as-yet financially strong CCGs, could change.

The warning came after the recent The financial sustainability of NHS bodies report from the National Audit Office (NAO) which said that collectively, trusts that provide NHS services ended 2013-14 with a £91 million deficit in contrast to the position in 2012-13, when the trusts returned a surplus of £592 million.

Overall, the NAO calculated that the NHS as whole in England ended 2013-14 with a surplus of £722 million because, NHS England and CCGs had a net surplus of £813 million, but this overall surplus fell sharply from the £2.1bn it reached in the previous year.

Speaking after the NAO report’s publication, the NHS Confederation said the financial position of the NHS had worsened since 2012-13, with more trusts and foundation trusts reporting deficits in 2013-14 than in the previous year.

Financial risk was also increasing in NHS trusts and foundation trusts, and those in severe financial difficulty “continue to rely on in-year cash support from the Department of Health”.

The NHS Confederation said the NAO’s findings backed up its own recent warnings made in written evidence submitted to the parliamentary health select committee for its current inquiry into public expenditure on health and social care.

The confederation said the health service had reached a point at which finances could collapse quickly throughout many organisations.

There was “considerable unease” over the financial situation, it said, with the NHS and public equally concerned about what impact future funding decisions might have.

Confidence in the health service’s ability to deliver planned savings was fading, it argued, alongside a reported £235 million shortfall in transformational savings in CCG budgets for 2013-14, as well as an unfunded gap of up to £2 billion each year from 2015.

These factors had led the organisation to raise what it called “serious alarm” over current NHS finances and it was calling for urgent action.

NHS Confederation chief executive, Rob Webster said: “We would welcome the government addressing the pressures facing the NHS it its Autumn Statement.

“This would provide breathing space to prepare for the significant service changes required in the medium term.”

The confederation has suggested various solutions including political parties accepting that efficiency savings above 3% are not realistic beyond 2015, and that health spending plans should be set out for the next 10 years to establish a “decade deal” between taxpayers and a NHS that needed financial certainty to plan health services.

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