NHS England to hold back forecast £120m from CCG Finances

Topics covered: Ridouts professional advice

NHS England has announced it plans to retain an expected £120m, to act as a commissioner contribution to the system risk reserve. Paul Baumann, chief financial officer for NHS England, justified this decision by stating there was a ‘clearly demonstrated’ need for a risk reserve following the tight financial situation last year.

The unexpected influx of £120m has come to be as a result of an adjustment of fees, agreed with the Pharmaceutical Services Negotiating Committee. The agreement involved a reduction in generic drug pricing within the NHS Drug Tariff, working out at an estimated saving of £15m per month. These changes came into place as of August 1st.

Though promising news, it has not been celebrated by all that have heard it. One such group not best pleased with this decision is the NHSCC. Normally, this “windfall benefit” would trickle down the system to benefit the CCGs in the form of reduced medicines expenditure.

This news comes not long after it was announced that strains to CCG budgets due to rising pressures. Though the funds allocated to CCGs is on the rise, in reality due to rising inflation and a growing population, the ‘CCG Pound’ value is diminishing. The NHSCC also argue that other indirect pressures such as an ageing population and an increase in demand of services are causes for a strain on their budget’s capabilities. It is expected that by 2019-2020, in comparison to 2016-2017, what a CCG can get for a person with the funds they have will have diminished by £5.82 per person.

Baumann has guaranteed that NHS England intents to make this money available to CCG investment in 2017-2018 “or subsequent years”. If at the end of this year the reserve does not need to off-set the risk of a system-wide deficit, which had to be done last year, then the money will be released to CCGs that met or improved on their control total and successfully released a mandatory 0.5% non-current reserve. Bauman believes that CCGs will be “no worse off in the short term” and that the NHSE will “explicitly recognise those CCGs which succeed in delivering their financial goals.”

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