CCGs have been asked to reduce their administrative costs by a fifth, an official letter has revealed.
In a letter sent to all CCGs on Friday, NHS England (NHSE) deputy chief executive Matthew Swindells asked the organisations to cut their administrative costs by 20% by 2020/21.
This follows NHSE and NHS Improvement ‘shared commitment to deliver a 20% efficiency’ within their new operating model, which will be established from April 2019.
Maximising available funding
Mr Swindells said that in view of the upcoming NHS long-term plan, it is crucial to ‘maximise the amount of funding available for direct patient care’.
He added: ‘We’re now asking CCGs to deliver the same level of reduction – 20% – by 2020/21.
‘Combined with national level action, this will free up a total of more than £320m a year compared to 2017/18, to be reinvested in improving patient care and supporting transformation of services as part of the long term plan.’
Although CCGs will be able to decide how to make these efficiencies, Mr Swindells suggested they look at the following areas:
- Working more closely with organisations across local health economies to improve efficiency, reduce duplication and remove bureaucratic and expensive contracting processes.
- Partnering with Commissioning Support Units and other support organisations to maximise efficiency and effectiveness in shared activities.
- Reviewing discretionary expenditure. This includes cutting spend on external consultancy support, as achieved last year.
- Considering mergers and joint working arrangements within local health economies.
‘More pressure’ on CCGs
NHSCC chief executive Julie Wood said the requested 20% cut means CCGs will be ‘under more pressure to carry out their responsibilities’.
She added: ‘We recognise the financial constraints facing the whole NHS so this directive to reduce commissioner administrative costs is not unexpected, and mirrors the expectations set by NHS England and NHS Improvement for their own organisations.
‘CCGs also want to maximise the money that can be spent on frontline patient care – and have already been taking strides to work more efficiently and collaboratively across the country to deliver for their patients and local populations.
‘It will be critical that these cuts to running costs don’t undermine the efforts happening across the system to transform health and care services for the better.’
NHS England said more details on the cost reductions expected from individual CCG will be revealed in the annual planning guidance in December.