Overall underspend rises despite CCG deterioration

There was a sharp rise in year-to-date overspends in clinical commissioning groups between months 6 and 8, but the commissioning sector as a whole remains in balance and is forecasting a larger than planned underspend at year-end.

According to month 8 figures, CCGs had an aggregate year-to-date overspend of almost £144m. At month 6 the combined CCG overspend was £74m. Halfway through the financial year, 36 CCGs had year-to-date overspends, but by month 8 this increased to 48.

Fifteen CCGs predict they will end the financial year with an overspend – four more than at month 6.

NHS England interim chief finance officer Matthew Style (pictured) said the areas with the most significant overspends were Staffordshire (£34.2m), East Kent (£16.9m) and London (£39.3m). But as in previous months, the CCG overspend is offset by underspending in other areas of the commissioning budget – £29m in direct commissioning and £138m in NHS England running and central programme costs. The latter includes income from GP rates rebates and counter fraud receipts not included in the operating plan.

After technical adjustments, the year-to-date aggregate picture for the commissioning sector is a £9.4m underspend. 

CCGs forecast a year-end overspend of £45m, but again this is offset by underspends in central budgets (£272.5m) and direct commissioning (£15m). Part of the offset includes the release of £60m from the centrally held quality premium budget, which NHS England does not expect to be earned by CCGs.

When technical adjustments are factored in (forecast to be £54.5m more than planned), the final year-end position is a forecast underspend of almost £188m.

Mr Style said the sector is now projecting over-delivery on its planned position. When this £188m is added to the sector’s planned £265m underspend, the forecast year-end underspend is £453m. Initially, the commissioning sector planned for a balanced year-end position but in September NHS England and NHS Improvement agreed a plan to recover planned year-end provider deficits that totalled £519m.

This would give providers a firm financial base for the first year of the NHS long-term plan. Commissioners’ contribution to offsetting providers’ overspend was set at £265m.

‘As in previous years, the pattern within [the financial position] is of emerging pressures within the CCG forecasts, particularly around overperformance on some contracts, offset by carefully managed underspends in some central budgets and underperformance against the quality premium,’ Mr Style said.

The position will be kept under close review,  he said, particularly with a series of deep dives using the month 9 forecast to ensure the commissioning system can play an appropriate part in delivering financial balance.

The risk-adjusted forecast at month 8 was improving – all remaining commissioning risks are expected to be offset by further central mitigations.