Executive summary:
1.1 NHS Clinical Commissioners (NHSCC) is the membership body of CCGs. Established in 2012, we have over 91% of CCGs in membership. We offer a strong national voice for our members on specific policy issues and support them to be the best they can to commission services effectively for their local populations.
2.1 CCGs delivered an unprecedented level of efficiency savings in 2017/18 – 3.1% of their allocations, equating to over £2 billion.
2.2 Historically CCGs have continued to deliver efficiencies year on year despite increasing pressures:
Year | Percentage of allocation delivered as efficiencies | Total amount of efficiencies delivered |
2014/15 | 2.1% | £1.38bn |
2015/16 | 2.2% | £1.48bn |
2016/17 | 2.6% | £1.99bn |
2017/18 | 3.1% | £2.49bn |
2.3 CCGs have been, and continue to, take concerted steps to deliver maximum value from the NHS pound, including through medicines optimisation, work to reduce procedures of low clinical effectiveness, and work to reduce low priority prescribing. At the national level, NHSCC has sought to support our members in this work. One way we have done this is through our partnership with NHS England, which resulted in the publication of national guidance to curb the routine prescribing of products that are for a self-limiting condition, which does not require any medical advice or treatment, or conditions which are suitable for care.[i] It has been estimated that this guidance could release as much as £136 million each year for CCGs to reinvest in other services. NHSCC continues to work with NHS England on the Evidence Based Interventions programme to reduce the numbers of procedures performed that are or no or limited clinical effectiveness, to reduce the prescribing of items that are of low priority, and will also continue our work on medicines optimisation.
2.4 However, savings have been increasingly difficult to find, as many of the comparatively easy savings have already been made:
Year | Planned efficiencies | Actual delivered |
2014/15 | 2.4% | 2.1% |
2015/16 | 2.4% | 2.2% |
2016/17 | 3.2% | 2.6% |
2017/18 | 3.8% | 3.1% |
2.5 Despite continued efforts and the unprecedented efficiency savings delivered by CCGs, they are increasingly financially challenged owing to a growing and ageing population with increasingly complex health and care needs, and comparative underfunding of the NHS over the last 8 years compared to historic levels.
2.6 As the result these pressures, CCGs will continue to be required to make difficult decisions about how to best meet the needs of their local populations with the limited resources that are available to them.
3.1 For the first time in October 2018, NHSCC, the NHS Confederation and NHS Providers came together to outline the reality behind the government funding settlement for the NHS. Our infographic drew upon the findings from the Institute for Fiscal Studies and the Health Foundation which estimated that by 2024 there would be a £10.5bn shortfall between the allocated funding and what would be needed to meet demographic and other pressures.[ii]
3.2 Together we identified seven things that the NHS Long Term Plan needed to include to make this settlement work and ensure the long term financial sustainability of the NHS. With the plan now published these are reviewed below:
3.2.1 Prioritise what the NHS can achieve with the funding available.
The plan contains thirteen clinical priorities alongside the delivery of new service models and the need for action on prevention and health inequalities. Our members have reported that it can be challenging for local areas to determine which to prioritise and in what order.
3.2.2 Identify what we could stop doing to remain sustainable for the future and focus funding on what works for patients.
NHSCC has been working with NHS England to produce national guidance on low priority prescribing and evidence based interventions, which although recognised in the plan, falls short of identifying any specific areas where the NHS should go further, with the focus on continued efficiency and reducing waste.
3.2.3 Set realistic levels of efficiency savings.
The plan sets an achievable and realistic efficiency target of 1.1% a year over the next five years, which is a considerable reduction from the 2%-3% targets in previous years. Overall, this will allow our members to rebalance local efforts between ensuring sustainability by delivering efficiencies, and transforming the delivery of health and care – with the focus in recent years being heavily on the former.
3.2.4 Support collaboration by removing financial and regulatory barriers to local integration.
On behalf of our members, NHSCC has been working with NHS England for some time to shape legislative changes that will support collaboration, ‘place-based’ commissioning, and integrated working. These are considered in greater detail in section 5.
3.2.5 Outline support for the current and future workforce.
The plan is clear on the need for more staff, working in rewarding jobs and a more supportive culture. The national workforce implementation plan to be published in 2019 is urgently needed, as is the assurance of adequate government funding for Health Education England. Our members consistently recognise workforce shortages as the greatest challenge to the successful delivery of the future NHS outlined in the plan.
3.2.6 Focus on prevention and reducing health inequalities.
Both of these areas are highlighted in the plan, although there is recognition that the former is not the responsibility of the NHS alone. Without national action to address prevention, then pressure will continue to increase on the NHS
3.2.7 The plan should be coupled with a resourced and robust financial plan for social care.
We still await further detail from government on the future of social care. The plan states that it has been developed based on sufficient social care funding being available so that it does not impose any additional pressure on the NHS.
3.3 Overall, our members’ view is that the plan makes considerable progress in ensuring future financial sustainability, but that there remains a pressing need for government to clearly outline the future funding model for social care and public health. This will be vital to ensure the future financial sustainability of CCGs.
4.1 In 2019/20, commissioners will continue to face the considerable challenge of delivering system financial balance whilst reconfiguring local structures and delivering new clinical priorities as set out in the NHS Long Term Plan.
4.2 Alongside this, CCGs have been asked to deliver a 20% reduction in running costs by 2020/21 and will need to ensure that they are planning for and taking actions to achieve these reductions during 2019/20. This means that clinical commissioners will have to do more for less. CCGs’ administrative costs were 1.4% of total net expenditure in 2017/18. Even including the £434 million CCG staff costs contributing to programmes in 2017/18 means their running costs are less than 2% of their overall expenditure. In context, this level of running costs is comparatively extremely low within the NHS. The Carter review highlighted that corporate and administrative costs in trust varied between 6 – 11% based on 2014/15 data. Moving to system working means that it may be appropriate to ensure that all parts of the NHS are aiming to achieve consistency in reducing running costs.
5.1 As the National Audit Office report notes, there are currently barriers to achieving the best value for the NHS pound across local systems.
5.2 Currently there is a need to remove perverse incentives that encourage a focus on individual organisations as opposed to system working. Basing payment on activity and having the tariff as the default approach means that systems may resort to the tariff rather than thinking about an approach that may incentivise better, more collaborative working (such as the blended payment for emergency care approach outlined in 2019/20 planning guidance). To reflect the move towards integration and collaboration across NHS providers within a place (including all types of providers from general practice to community services and acute care), NHSCC would like to see a replacement of the default to using the payment by results tariff, with a mandate for commissioners and providers to mutually agree a locally appropriate contract form, which could be a blended payment model. This should be viewed as a measure of system maturity and mutual agreement should be the expectation.
5.3 Another barrier our members have raised with us is the balance of shared responsibility to improve health outcomes. CCGs have statutory responsibility to improve health and health outcomes, as do local authorities, but providers do not currently have the same responsibility. Currently, the need for individual organisations to meet their own statutory responsibilities can hinder partnership working, as raised in our recent joint report with NHS Providers.[iii] Reciprocal duties for improving health and health outcomes could address this and contribute to supporting our wider goal of securing a stronger chain of accountability for managing public money within and between local NHS organisations.
5.4 In some cases, CCGs have flagged that competitive procurement can be time-consuming and onerous without adding value. Our members would welcome a change so that procurement is only needed if the commissioner cannot secure the changes needed with the providers working within the place and system. This would cut delays and costs of the NHS automatically having to go through procurement, and NHS commissioners would be free to decide the circumstances in which they should use procurement, subject to a ‘best value’ test to secure the best outcomes for patients and the taxpayer. The current rules lead to wasted procurement costs and fragmented provision, particularly across GP/urgent care/community health services.
5.5 We were pleased to see that many of these barriers were recognised in the long term plan’s proposals for potential legislative changes. We look forward to further engagement on these proposals, including exploration of how they could be overcome within the current legal framework.
6.1 Payment reform must be prioritised – this is something we have been calling for on behalf of our members for some time and were pleased to see the first steps towards payment reform included in the long term plan.
6.2 Responsibility to improve health outcomes should be shared. NHS providers, as well as commissioners, should have a responsibility to improve health outcomes. This would incentivise system partners to work towards shared goals, rather than solely focusing on their individual organisational responsibilities.
6.3 Social care and public health must be sufficiently funded and considered alongside planning the delivery of the NHS Long Term Plan, without this, the future financial sustainability of the NHS remains in doubt
6.4 CCGs will need support to make reductions in running costs. NHSCC is conversation with NHS England on this topic and is holding a joint roundtable on 21st February to discuss the support required to enable CCGs to make the 20% running cost reduction. However, as we move towards more system working, other organisations must look at what administrative efficiencies they can deliver within their own organisation, and across systems.
February 2019
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[i] NHS Clinical Commissioners and NHS England (2018). Conditions for which over the counter items should not routinely be prescribed in primary care: Guidance for CCGs. Available from: https://www.england.nhs.uk/wp-content/uploads/2018/03/otc-guidance-for-ccgs.pdf
[ii] NHS Clinical Commissioners, the NHS Confederation and NHS Providers (2018). The reality behind the 2019-24 NHS funding settlement. Available from: https://445oon4dhpii7gjvs2jih81q-wpengine.netdna-ssl.com/wp-content/uploads/2018/10/NHSCC-Funding-graphic-Vfinal.pdf
[iii] NHS Providers and NHS Clinical Commissioners (2018). Driving forward system working: A snapshot of early progress in collaborative commissioning. Available from: https://www.nhscc.org/policy-briefing/driving-forward-system-working-a-snapshot-of-early-progress-in-collaborative-commissioning/