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24.11.16

CCGs overspend budget by £240m, but NHS England still set to balance books

NHS England’s financial performance report for 2016-17 has shown that CCGs have so far overspent by £235.7m this year, with NHS England reporting a gross year-to-date overspend of £168m.

The second quarter financial report revealed that 39 CCGs have plans that show a cumulative deficit by the end of the year, and overall CCG spending so far this year has been 0.6% higher than planned. 

Despite these figures, CCGs are set to overspend by £190.2m, a 33% decrease from last year, with NHS England set to balance its books as a whole, overset by an underspend in central costs and the half year value of the commissioners’ risk reserve.

“Overall at month six, NHS England is reporting a gross year to date overspend of £168m (0.3%),” wrote Paul Baumann, chief financial officer for NHS England. “There is an overspend on CCGs and Specialised Commissioning which is partially compensated for by an underspend on other areas of direct commissioning and NHS England central budgets.

“The current forecast and risk assessment show that CCGs and NHS England are on course to balance their combined budget for 2016-17 as a whole, while contributing a managed underspend to fully offset the planned £580m net deficit in the trust sector.”

But 84 CCGs reported year-to-date overspends, 49 of them greater than 1%. Baumann noted that the majority of CCGs assume they will be able to recover their financial position, but 35 do not, with 11 forecasting an unplanned cumulative deficit.

The four regions of CCGs are forecast to overspend by £190.2m by the end of the year, with the south of England forecast to post the highest overspend at £90.3m. However, Midlands & East has spent £120.6m more than planned so far this year, a 1.1% variation from the plan. But it is expected to bring this down to £35.2m.

NHS England has said that a higher level of financial risk was identified in planning due to previous years, reflecting the organisation’s higher ambition with regard to efficiency gains. These gains are expected to be 40% higher this year than in the 2015-16 financial year.

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