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A review of the role and costs of clinical commissioning groups

Today’s report from the National Audit Office has found that while many clinical commissioning groups are performing well and within budget, others are failing to function effectively or hire and retain the high-quality staff they need.

CCGs were established as part of the Health and Social Care Act in 2012 to help health services be more responsive to patients’ needs and to align clinical and financial decision-making. Since being introduced, their scope has expanded to take greater responsibility for commissioning GP services and integrating health and social care systems.

Over half of CCGs were rated by NHS England as either ‘outstanding’ or ‘good’1 in 2017-18, but more than 40% were rated as either ‘requires improvement’ or ‘inadequate’, with 24 CCGs deemed to be failing, or at risk of failing. While most stakeholders provide a positive view of their engagement with CCGs, neither the Department of Health and Social Care nor NHS England have undertaken an overall assessment of CCGs’ progress in achieving their policy objectives since they were introduced.

An increasing number of CCGs are overspending against their total budget plan. In 2017-18, 75 of 207 CCGs (36%) spent more than planned with a total overspend of £213 million across all CCGs. This compares with 57 CCGs in 2016-17 and 56 CCGs in 2015-16. As part of their total budget plan, CCGs have consistently spent less than their running costs funding, which has been reduced from £1.35 billion in 2013-14 to £1.21 billion currently. In November 2018, NHS England confirmed that CCGs’ running cost allocation would reduce by a further 20% by 2020-21.

CCGs across the country have struggled to attract and retain high-quality leadership. While 54% of CCGs were assessed by NHS England to have good leadership, issues around recruitment and retention include a reluctance among staff to step up to senior positions because of increased pressure, the uncertain future of CCGs and a lack of access to training and development.

Commissioning was introduced into the NHS in the early 1990s, when the purchasing of healthcare services was separated from their delivery. Since then there have been several changes to the structure of NHS commissioning organisations and their population coverage.

The structure of CCGs is evolving, with mergers, shared senior management teams and increasing joint working. This is being prompted by factors including wider changes across the NHS, budgetary pressures and as CCGs’ understanding of the most appropriate commissioning structure for their local area develops. For example, there have been eight mergers of CCGs since 2013. Most CCGs now share accounting officers and some are establishing joint commissioning arrangements with their local authority. This trend is expected to continue, which will likely lead to fewer CCGs covering larger populations.

Their larger scale is intended to help with planning, integrating services and consolidating leadership capability, but there is a risk that working across greater populations will make it more difficult for CCGs to design local health services that are responsive to patients’ needs. NHS England has allowed CGGs to take the lead in determining their new structures, and CCGs see their future role as being that of a strategic planning organisation, with the more operational activities relating to commissioning being sub-contracted to provider organisations.

NHS England is expected to set out its vision for commissioning in its long-term plan for the NHS in December 2018. It has said it will step in where CCGs diverge from its vision of effective commissioning, but it has not set out the criteria it will use to determine when to intervene.

We have seen almost three decades of change to NHS commissioning. It would be a huge waste if in five years’ time NHS commissioning is undergoing yet another cycle of reorganisation resulting in significant upheaval. The current restructuring of CCGs must deliver balanced and effective organisations that can support the long-term aims of the NHS and deliver a much-needed prolonged period of stability.”

Amyas Morse, the head of the NAO

Notes for Editors

Key facts

195
clinical commissioning groups (CCGs) as at April 2018, down from 211 in 2013

£81.2bn
total net expenditure by CCGs in 2017-18

£1.1bn
net running costs of CCGs in 2017-18

1 April 2013
is the date that CCGs became operational, replacing primary care trusts

78,000 to 1.3 million
is the range in CCGs’ population coverage as at June 2018

1.4%
of CCGs’ overall net expenditure spent on running costs in 2017-18 (1.5% of gross expenditure)

7%
aggregate underspend across CCGs against their allocated funding for running costs in 2017-18

8
formal mergers of CCGs between April 2013 and April 2018

117
CCGs share an accountable officer with at least one other CCG (as at August 2018)

24
CCGs are currently deemed to be failing, or at risk of failing, to discharge their functions by NHS England (as at October 2018)

£810 million to £500 million
reduction in commissioning support units’ income (the organisations that provide support services to CCGs) between 2013-14 and 2017-18.

  1. In 2017-18 42% (87 of 207) of CCGs were rated either ‘requires improvement’ or ‘inadequate’. 10% were rated 'outstanding', with 48% rated ‘good’.
  2. Funding for CCGs’ running costs has reduced by 10% in 2015-16 from £1.35 billion to £1.21 billion, and has been held at this level. Overall, CCGs have consistently spent less than their allocated funding for running costs.
  3. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  4. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 59/18