By Alison Scott | 13 March 2013
Clinical Commissioning Groups are being born at a time of financial and structural upheaval in the NHS. Chief financial officers have a vital leadership role
The Greek philosopher Heraclitus is credited with the phrase ‘the only constant is change’. At times it seems that nowhere is this more true than in the public sector and, within this, health is high on the list.
We are rapidly heading towards the latest reincarnation of the health commissioning side, with the introduction of Clinical Commissioning Groups. As these new organisations begin to feel their way, the role of their chief financial officers will be crucial.
It would be easy to dismiss CCGs as a logical progression from primary care trusts but they are actually quite different. They also bring a number of challenges, especially as their introduction is set against the backdrop of wider health reform and cuts in management budgets.
An important feature is the variation in size of the new organisations, from a virtually county-wide CCG to a very small ten-doctor cluster. This highlights for the first time a move towards true localism and away from central control.
In order to better understand the governance and financial management challenges facing these organisations, CIPFA held a workshop last autumn with a small group of new CCG chief financial officers.
The discussion focused largely on three areas: managing the transition, sustainable commissioning and governance. The complexity of the change, with current funding and costs being split among numerous new organisations, provides a real challenge to those involved to ensure that nothing gets lost in transition. The resolution of current issues around baseline allocations will be critical, especially given the constraints on overall resources.
A simplistic view of the new arrangements is that the CCGs will commission services from NHS providers that are truly independent and set up to compete both with each other and with private sector providers.
The reality is much more complicated. The new organisations face a delicate balancing act in the way they commission care – putting the immediate costs of that care and the short-term savings required against the need to ensure access to locally based services over the long term. This is particularly the case with acute provision, where a fully developed mixed economy does not yet exist.
Get the balance wrong and the commissioning groups could put the financial sustainability of their local acute trusts at risk.
Sustainable commissioning and the need to find efficiency savings across the overall health budget will require commissioners and providers to work together to ensure that each part operates in a way that maximises benefit to the whole. The work around ‘pathways to care’ is a good example of where the CCGs will need to work with their acute providers to ensure overall improvements are achieved.
For children’s services, this type of working becomes even more difficult with three separate commissioners buying care. Also added into the sustainable commissioning mix is the need to work together to achieve efficiency savings. These combine to make a commissioning environment that would challenge the most experienced organisations, let alone new ones trying to get to grips with a fast developing environment.
GPs have been promised radical change as part of the promotion of health reform, but the issues set out around sustainable commissioning are more suggestive of ‘steady as she goes’. This tension between aspirations and the constraints of reality brings governance clearly into focus.
Decisions will need to be taken in full understanding of all the issues, including finance, and with a view to the medium-term objectives, performance and sustainability of the organisation.
Vital to establishing these new governance structures and facilitating the very necessary relationship between commissioners and providers will be the chief financial officers working alongside the ‘accountable officers’.
The new organisations are likely to feel very different to the PCTs they replace and the way the CFOs develop their roles and networks will be essential to their success.
To help this transition, CIPFA will shortly publish a draft Statement on the role of the chief financial officer in Clinical Commissioning Groups. It will explore how the CFOs can establish themselves as a vital part of the leadership team of the new organisations, ensuring a successful initial transition – and resilience in the face of inevitable future changes and further financial pressures.
Alison Scott is assistant policy and technical director at CIPFA
