“One of England’s largest clinical commissioning groups has increased its planned deficit by nearly £40m.
Devon CCG, formerly part of a “success regime”, is now forecasting a £66m deficit in 2019-20, despite initially targeting ending the year £27m in the red.
The £1.2bn-income CCG broke even for the first time in its history in 2018-19, after it achieved a £25m deficit which unlocked £25m of commissioner sustainability funding.
Devon’s problems are compounded by the “increasing expectation” that several of the county’s providers are at risk of missing their control totals, according to the CCG’s latest finance report.
Additionally, Torbay and South Devon Foundation Trust, which was not part of the success regime, has expressed concern about a “top-down approach” by Devon’s sustainability and transformation partnership over the creation of a long-term financial plan.
It comes just two months after HSJ revealed external consultants reported a culture of “learned helplessness” and “crisis mentality” among Devon’s NHS leadership, with individual chiefs “retrenching” back into their organisations when faced with difficult decisions.
Savings plans
Devon’s STP initially forecast a deficit of £115m for 2019-20 against a control total of £43m. However, the area then went through an “intensive programme supported by NHS England/Improvement” to reach an “acceptable position”, according to Devon CCG’s board papers.
This resulted in the forecast deficit being reduced to £70m and was based on “accelerating” transformation programmes across Devon, with the CCG tasked with finding the extra £45m of savings required to hit it.
This meant the CCG’s savings plan rose from £36m to £81m.
The revised plan is yet to be approved by NHSE/I, but the CCG now says it cannot find savings worth £39.5m, leading to the rise in the deficit forecast.
Asked what transformation programmes the CCG had hoped would yield savings, a spokesman said this included:
Revising down the level of forecast demand growth so it was “more closely aligned” with national benchmarking;
Managing demand for hospital services by accelerating planned improvements in productivity; and
Updating “projected increases” in additional funding.
But, according to the CCG’s board papers, it will not be possible to deliver the proposed savings due to pressures within “continuing healthcare, prescribing and independent sector contracts”.
Control totals
The CCG’s finance report also warns Devon’s providers are increasingly at risk of missing their control totals.
Torbay and South Devon FT has moved its forecast deficit from £3.8m to £18.8m after missing out on expected income in relation to social care services provided to Torbay Council, failing to deliver savings schemes such as reducing outpatient follow-up appointments, and spending more money than planned on agency staff.
The trust also reported sickness levels in “key specialties” — such as emergency, respiratory and stroke — adversely affecting the organisation.
This autumn, the trust hired KPMG to review its finances, but the “draft” report has not yet been published.
Additionally, the trust’s finance committee has heard concerns from members about a “top-down approach” being adopted by STP chiefs in charge of preparing a long-term financial plan for the health economy.
According to the committee’s minutes, the approach “does not take account…of the unique position of Torbay and South Devon as an integrated trust which carries the risk of adult social care”.
The minutes went on to state that members felt it is “imperative” the trust “challenges the modelling approach” used by the STP to avoid financial targets which “lack credibility”.
The trust did not answer when HSJ asked it to clarify what the problem was with the STP’s modelling approach.
Asked for a response to the allegation of a top-down approach, Devon STP’s finance lead John Dowell said: “All partners across the Devon system… are fully focused on solving the performance and financial challenges we face.”
Elsewhere in Devon, University Hospitals Plymouth Trust did not comment when asked if it was on track to achieve its finance plan to break even. However, its latest board papers stated it faced a “forecast shortfall” against its £25m savings programme which — alongside other finance pressures — means the trust is facing a “significant challenge to deliver its financial plan”.
Both Northern Devon Healthcare Trust and Royal Devon and Exeter FT are on track to hit their targets (breakeven and £8.6m surplus respectively).
Devon Partnership Trust, which provides mental health services, is also reporting being on track to deliver its planned £1.6m surplus, according to its latest board papers.”
Source: Health Services Journal
East Devon Watch 