News / Baumann warns of commissioning pressures ahead

NHS England chief financial officer Paul Baumann (right) has commended commissioning finance staff for their work in 2013/14, but warned the sector faced rising pressure over the next few years.

Commissioners (NHS England and clinical commissioning groups) reported a combined surplus of £790m at the end of 2013/14, according to unaudited figures.

While the sector had ‘done miraculous things’ in the first year of the new commissioning structure, in an exclusive interview with Healthcare Finance, Mr Baumann said the financial environment had been relatively ‘benign’ compared with the years ahead.

In addition to about £140m in transitional funding and significant start-up-related running cost underspends, commissioners had access to a larger than normal drawdown of historic surpluses.

However, this did not belittle the achievement, with CCGs spending under plan by 0.1%. Many CCG chief financial officers are in their first finance director role, and some commentators had warned that their relative inexperience could be an issue, but standards of financial management were at least as strong as before.

Mr Baumann acknowledged that NHS England had underestimated the challenge of changes in specialised commissioning, which overspent by almost 3% (£377m) in 2013/14. Growth of 5%- 6% a year in this area was unaffordable and action has been taken to strengthen specialised commissioning financial management. Contracts for specialised commissioning were still being finalised in some regions.

‘We are very nearly there in terms of balanced plans across the sector, but it is clear that the overall plans contain significant risk, and mitigations are much more limited as we have had to commit all of the drawdown at the start of the year this time,’ he said. ‘So the quality of our in-year monitoring and readiness to take corrective action will be at a premium.’