Peterborough and Cambridgeshire GPs group reveals £75m overspend

The CCG, held its first online Annual General meeting this week(15 September) where its financial position was discussed.

It announced a year-end overspend of £74.99m, and projects an overspend for the coming year of £54.4m.

The CCG (CCG) commissions health services on behalf of the patients it serves and includes all 86 GP practices in Peterborough and Cambridgeshire and two practices in North Hertfordshire (Royston) and two in Northamptonshire (Oundle and Wansford). Louis Kamfer, Chief Financial Officer CCG told the meeting: “The CCG has delivered its planned deficit for the year 2019/20, of £74.99m which was the agreed deficit position with our regulator.

“But I feel it’s really important to put a context around that, because the figure was part of a negotiation that we’ve agreed as part of the Sustainability and Transformation Partnership (STP).

“What that has achieved allows us to access a significant amount of support funding for our providers, and if I just put that into further context, the additional support funding that we’ve been able to access through our collective deficit was c.£86m.

“The deficit therefore that we will have achieved as an STP was £101m compared to £148m the previous year.

“So, I think the benefit there, £148m down to £101m, and accessing £86m of support funding, is really important in the context of the CCG deficit of £74.99m, and the role that we’ve played to achieve that.

“Obviously, as an organisation we haven’t achieved our control total which the regulator set at £25m deficit, and as a result of that we were unable to access £25m of Commissioner Support Funding.

“But as a board we’ve already made the conscious decision to forego that to achieve the best level position as an STP.

“In order to deliver the £74.99m deficit we’ve had to deliver approximately £28m of efficiency savings, but we’ve not met our ‘break-even’ figure which means we’ve not met that financial duty.

“However, we’ve not exceeded our capital resource and we’ve not exceeded our running costs, so those two financial duties are met.

“That £28m saving was made through several key successful projects in 2019/20, particularly in contract negotiations where negotiating longer term guaranteed income contracts with non-NHS providers for a reduced value saved £16.1m, while reducing prescriptions for over the counter medicines, reducing low clinical value medication and enabling switches to lower cost medication – all of which saved an additional £3.1m

“To summarise all of this I will look at how the CCG is funded: we get an annual programme budget of £1.1bn (£1,107.1m) to commission services; this is before the £58m reduction for prior year deficits.

“We also get a running costs budget for administration costs which is £19.8m.

“And we also get a Delegated Commissioning Budget for Primary Care costs which is £129.7m.

“The CCG total annual budget for 2019/20 was therefore £1.2bn (£1,256.6m)

“If we look at the breakdown of where all that money was spent in 2019/20, then we can see 51% went to Acute Services, 21% to Primary Care, 10% to Mental Health Services, 9% to Community Services, 6% to Continuing Care with the remainder made up of Central Budgets and Reserves and Running Costs (1%).

“As part of our long-term plan that we’ve agreed as an STP, we really want to increase the proportion of our investment in Primary and Community Care, and that is the direction of travel that we will adopt going forward.

“I think that we all recognise as an STP that the level of investment going into the Acute Services is not sustainable, and that we need to reverse that trend thereby helping our hospitals with more investment.

“The formal conclusions from our external auditors, Ernst & Young, was that these figures were a true and fair account of our financial position.

“They didn’t identify any significant deficiencies in the design or operation of the internal controls that might result in a material misstatement in the financial statements.”

In their report, external auditors Ernst & Young said: “The CCG has reported a deficit of £74.988 million for the 2019/20 financial year. We referred this matter to the Secretary of State on  February 13,  2020 under section 30(1)(a) of the Local Audit and Accountability Act 2014.

“The CCG has been under legal directions from NHS England for the whole of 2019/20. These measures are as a result of prior year issues, upon which we have previously reported.

“The CCG has not yet succeeded in addressing the underlying deficit in its budget and is forecasting a further deficit of £54.4 million for 2020/21.

“This issue is evidence of a weakness in proper arrangements for maintaining statutory financial functions.”

Total salaries (including benefits), paid to CCG staff (Executive Directors = 4 female, 1 male; Senior Managers = 101 female, 50 male) in 2019/20 was £17,354,000.

A full set of accounts can be obtained within the Annual Report here or by email from the CCG: [email protected]

The next meeting of the CCG is on November 3, 2020.