News / CCG estimates to aid early finance planning

Clinical commissioning groups (CCGs) and local authorities can begin planning the delivery of services following the publication of baseline spending estimates, health secretary Andrew Lansley said.

According to the Department of Health, the estimates were based on 2010/11 outturn spending uplifted to 2012/13 values. They do not include administration costs.

It estimated CCGs would spend almost £65bn, including £4.6bn on public health services in 2012/13 – £2.2bn of which would be allocated to local authorities for the delivery of their proposed public health duties. However, further analysis is needed before 2013/14 allocations can be set later this year.

‘There is more work to do, but these estimates mean that CCGs and local authorities can begin planning how to deliver the frontline services that matter the most,’ Mr Lansley said.

He added the Advisory Committee on Resource Allocation would publish its formula for allocating funding to CCGs and public health funding to councils in due course.

Primary care finance managers told Healthcare Finance the estimates were a start, but were of limited value. One finance manager said the public health figures looked to be ‘fixed in stone’ but for CCGs the position was ‘much harder’. Another said the figures were no more than indicative and would be replaced by figures to be taken from final accounts for 2011/12.

‘There are clearly some inherent flaws in taking outturn expenditure to inform the allocation baseline setting process. I would hope that any refresh of the exercise allows for a level of sophistication and reference to recurrent baseline budgets that just wasn’t there in the exercise carried out last year,’ said one finance director.

CCGs would become ‘hungry’ for budget information as they go through the approval process in late summer. ‘It will be important for them that they can articulate their relative funding positions going forward and be truly ready for the 2013/14 contracting round,’ said the finance director.

Another said risk sharing across health economies, particularly for lower-volume, high-cost services, would be important in ensuring CCGs can live within their means.

‘Some risks can be mitigated by joint service planning and commissioning – for example, cancer networks – but some will also require financial risk sharing across CCGs. Smaller CCGs will need to do more of this than larger ones,’ said the finance director.