CCGs are expecting to report a combined surplus of approximately £250m for 2016/17, after a £16m deficit was recorded the year before, a report has said.
A report by the Healthcare Financial Management Association (HFMA) has said that the surplus will largely come from the release of CCGs’ 1% risk reserve funds.
CCGs were told to save 1% of their allocation in 2016/17 as a ‘risk reserve’ that could be used later in the financial year to help balance the books if necessary.
CCGs are expecting to report a combined surplus of approximately £250m for 2016/17, after a £16m deficit was recorded the year before, a report has said.
A report by the Healthcare Financial Management Association (HFMA) has said that the surplus will largely come from the release of CCGs’ 1% risk reserve funds.
CCGs were told to save 1% of their allocation in 2016/17 as a ‘risk reserve’ that could be used later in the financial year to help balance the books if necessary.
In March 2017, NHS England allowed CCGs to release these reserves.
However, in the same month NHS England said the contingency funds will be used in full to offset trust deficits, which amount to £791m in 2016/17.
Without the money from the risk reserves, CCGs have forecasted a £550m overspend in 2016/17.
Niall Dickson, chief executive of NHS Confederation, said the finding were ‘a wake up call’.
He said: ‘Our members have repeatedly pointed out that they cannot sustain current levels of service with such a fragile funding settlement and that this is likely to get worse with NHS spending per head falling next year.
‘On top of this the finance chiefs are pointing to the risks in current savings plans – we cannot rely on good fortune to make budgets balance.’
Mark Orchard, president of HFMA, said the surplus is a ‘reason to be positive’ but added that ‘this is just the beginning’.
He said: ‘The efficiency challenge in 2017/18 is even tougher. Collectively, everyone in the NHS needs to find ways to be more resourceful, more innovative and more collaborative to address the financial challenge in front of us.’
