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Fair CCG funding 'not prioritised' by DH

Fair CCG funding 'not prioritised' by DH

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Slow progress has been made in allocating commissioners their fair share of funding because the Department of Health (DH) and NHS England have prioritised the financial stability of local health economies, the National Audit Office (NAO) has argued. 

A total of £79 billion has been allocated to local commissioners in 2014-15, equivalent to £1,400 per person. Following the reforms to the health system in 2013, the three different sets of commissioners (clinical commissioning groups, NHS England area teams and local authorities) receive separate funding allocations to commission services for their local populations.

The NAO report claims that DH and NHS England's approach is "generally sound" and based on expert advice and are increasingly transparent. 

However, the tight financial position the NHS is in makes it difficult to achieve both fairness and financial stability. 

There is wide variation in the extent to which the funding received by local commissioners differs from their target allocations, which are based on relative need. In 2014-15, over three-quarters of local authorities, and nearly two-fifths of clinical commissioning groups, are more than five percentage points above or below their fair share of funding per person.

Funding for clinical commissioning groups varies from £137 per person below target to £361 per person above target.

The NAO report claims that DH and NHS England's decisions about how quickly to move commissioners towards their target funding allocations "are not based on evidence". 

According to the report, the decisions are essentially a matter of judgement about the changes that local health economies can tolerate without being financially destabilised and about the effects of organisations not receiving their target allocations. Exploratory analysis by the National Audit Office suggests that local bodies may be able to tolerate changes in funding that are more significant that those currently allowed.

Amyas Morse, head of the National Audit Office said: “Funding allocations have reflected, among other factors, a desire not to upset local health economies by taking funding away or even by increasing it by less than inflation. 

"This has significantly slowed progress towards a fair distribution where funding fully reflects need across the country. The Department and NHS England need to consider carefully whether this approach is fast-moving enough to sustain hard-pressed local areas in the next few years.”

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