News / CCG reserve to offset deficits

In his report on the commissioning sector financial position at the end of quarter three, chief financial officer Paul Baumann (pictured) said the 1% of allocations CCGs had been asked to set aside at the beginning of the financial year would be ‘used as necessary to offset any overspends across the health system to ensure the delivery of overall financial balance’. At today's board meeting he said it was 'very likely' that the £800m will be released to secure overall financial balance.  

He added that the creation of the 1% reserve has placed significant pressure on commissioners. This was reflected in the increase in the level of savings required from an average of 2.2% in 2015/16 to 3% in the current financial year.

At month nine CCGs reported a year-to-date overspend of £437m, with a year-end forecast of a £370m overspend. However, this is offset by underspends in direct commissioning and NHS England running and programme costs – both in the year-to-date and forecast outturn figures.

An overspend of £65m is also forecast for technical and ringfenced adjustments at year-end. This is due to the release of provisions in CCGs (£45m) and lower than expected depreciation charges (£20m).

The commissioning sector reported an overall overspend of £61m at Q3, but the overall forecast outturn is a £5m underspend.

While 98 CCGs are reporting year-to-date overspends – 60 of which are greater than 1% of allocation – 71 predicted year-end overspends. The figures show a deterioration of CCG financial positions – 27 CCGs are forecasting unplanned year-end deficits and, of the 39 with planned cumulative deficits, 23 are now forecasting a position worse than their annual plan.