Financial Risk Management and Budget Holding in the NHS for Clinical Commissioning Groups

The health service reforms proposed under the present coalition government are far reaching and have been debated intensively by politicians, NHS professionals, patient groups, charities, local government and many other interested stakeholders.

The major changes include the abolition of regionally based strategic health authorities and local primary care trusts, the development of a new NHS commissioning board and clinical commissioning groups, and public health responsibilities being transferred back to their former home within local authorities.

The Comprehensive Spending Review (CSR) of 2010 outlined a settlement for health in England that has moved away from generous to flat-level growth over the CSR period.

This means that the NHS has to achieve efficiencies of £20bn over the period to 2014/15 to manage the increasing costs of an ageing population, improving technology and drugs, and the prevalence of long-term conditions.

The challenge of structural reform, improving quality, and meeting increasing patient expectations whilst nurturing innovation in new clinical commissioning groups within a tight financial envelope is a tall ask.

The focus of this publication is financial risk management and budget holding for new clinical commissioning groups and is a response to these new challenges. Part of managing risk is also to have a comprehensive understanding of the reform agenda.

This publication covers the organisational changes, the portfolio of services and responsibilities that clinical commissioning groups and the NHS commissioning board will manage, understanding how resources have been allocated to NHS commissioners, and the management of risk. It is not the intention to prescribe the governance arrangement of the new clinical commissioning groups but to outline a best practice approach that can support development.

The provision of shared services is considered together with the benefits and limitations of certain models as the direction of cost-effective shared provision and support services is recommended across a range of publicly provided services.