CCGs – the real deal

26 Mar 13
Noel Plumridge

Anyone who seriously believes the new Clinical Commissioning Groups will be in charge of NHS services and funding hasn’t looked at the small print

Imagine, if you will, you’ve been appointed finance director of one of the English NHS’s new Clinical Commissioning Groups. One of 211 new organisations, accountable from April for an annual budget of, say, £300m, which is expected to purchase health care for a population of almost 300,000.

Imagine your fellow directors have read Richard Lewis’s excellent description, here in Public Finance, of the brave new NHS world. How it hangs together; how CCGs will achieve, in straitened times, what primary care trusts never quite managed during the years of plenty.

Now consider: how will you break the news to your colleagues?

They, the saps, still believe GP-led CCGs are free to take bold decisions; to begin the strategic change the NHS needs if it’s to deliver 4% efficiency savings this year, next year, every year. Fewer buildings; more care closer to home; better integration. Telemedicine. That Wanless ‘fully engaged’ scenario. Perhaps even some growth potential for GP practices.

So how come, they’ll ask, we’re hemmed in by the ‘local area team’ of the NHS Commissioning Board? There was nothing in Andrew Lansley’s Health & Social Care Act about local area teams. How come the commissioning board has redefined ‘specialist services’, which it purchases directly, so that Sir David Nicholson, chief executive of the board – not we – clings on to £12bn of the NHS budget?

How come we have to procure ‘support services’ from a commissioning support unit stuffed with the very PCT apparatchiks and time-servers we thought we’d escaped from?
There was nothing in Lansley’s Act about commissioning support units. How come we pay them good money and they hoover up data that, before long, some big consultancy will be using to beat us up with? How come they even do the accounting?

The innocents. Did they really believe government would simply hand over £65bn to GPs, to spend as they wished, via organisations that barely exist?  That’s not the way the Treasury works.

How come, they’ll ask, we have to start business without the promised realignment of the NHS funding formula? We were promised funding levels to reflect our population’s needs, not the perpetuation of large hand-outs to areas with inferior lifestyles.

So how was the commissioning board able to scupper the new formula, as late as December, and impose a flat 2.3% increase?  What right had they to say the new formula didn’t give proper weight to ‘health inequalities’?

And what’s all this, they’ll say, about us inheriting debt from the PCT?  We were told we’d start with a clean balance sheet, and that PCTs would end 2012/13 in balance. So kindly explain, finance director, why we look like starting our life owing tens of millions?

The numbskulls. Didn’t they read the small print? We’re secure, said the Department of Health, from PCT legacy debt that arose prior to 2011/12.

But the big issue now is retrospective liability for continuing care funding. Anyone claiming reimbursement for care received between 2004/05 and 2010/11 had to do so by last September. So naturally they did – about 60,000 of them.  It’s big money, and it’s a ‘this year’ issue.

Besides, we might have guessed that with their demise approaching, PCTs would duck difficult decisions. They’ll say they no longer have legitimacy, and that may be so, but it means come April we’ll be straight into imposing emergency controls and rationing.

How else are we to come up with the extra 3.5% savings the commissioning board wants from us next year? Let’s add it up. We have to make a ‘cumulative surplus… of at least 1% of revenue’, and plan for 2% recurrent surplus by the end of 2013/14. Then we must hold at least a further 0.5% in contingency funds, to ‘mitigate risk’. And, like this year, a further 2% is ring-fenced for non-recurrent spending, released only on the say-so of – yes – the board’s local area team.

That’s all money withdrawn from the health system. On recent form, it means the prime minister can boast about safeguarding NHS funding, Nicholson can crow about the NHS being in ‘surplus’… and somewhere north of a billion goes straight back to Chancellor George Osborne’s deficit alleviation fund.

In fact, the cash never even leaves the Treasury. It’s financial smoke and mirrors. But go to the hospital and the effect’s plain enough.

Ah yes, the hospital. Our overlords really believe the CCG, because it holds the purse strings, will get its way in negotiations. If the hospital trust is awkward, let loose the dogs of competition.

How naive. Hospital trusts are merging, left, right and centre. The private sector isn’t interested: they’ve watched Circle floundering in Cambridgeshire.  So what competition, pray?

The only serious competition is between the big outsourcing companies, waiting to take over our community nursing and therapies when – as we must – we offer them up for tender.

And don’t, please, mention the cap on CCG management costs.

Noel Plumridge is an independent consultant and former NHS finance director. This article first appeared in the April issue of Public Finance

Did you enjoy this article?