Minimum financial allocations to CCGs match official inflation forecasts but will still be a cut

NHS England has published the new CCG financial allocations. As expected, the threat of actual cash cuts contained in the consultation paper which most people in the North objected to, was lifted. Sheffield and the majority of CCGs will receive an inflation equivalent increase of 2.14%. This represents a recognition from NHS England that a complete change to age-related population funding would be both destabilising and unacceptable in many areas. Although NHS and Council officials in Sheffield will breathe a mighty sigh of relief this is not quite the victory which a press release from Sheffield City Council appears to suggest. The inflation increase is based on the 4 year low of 2.1% recorded in November. The total budget uplift for the NHS next year is 3.1% but there are several reasons for expecting inflation to rise again, and NHS inflation when there are normal wage rises tends to be around 1% higher than the general rate. So it's unlikely that CCGs receiving 2.14% will have the same purchasing power as this year. However Cambridgeshire (Lansley's constituency) gets 2.9% and Oxfordshire (including Cameron's constituency) gets 3.32%. London averages a 3.07% increase and the Thames Valley 3.48%. Both the inflation forecast and the minimum allocation increases for CCGs for 2015-5 are 1.7% (2.3% for the NHS as a whole). NHS England bases the reallocations on a new formula which includes factors for age, population, and deprivation, as well as differing regional costs (the Market Forces Factor). Applying the formula produces target allocations for each CCG which may differ significantly from their current allocations (partly because of the way in which populations are estimated). The actual allocations are intended to move slightly towards the targets partly in order to deal with CCG deficits. 16 of the 37 CCGs forecasting a deficit this year are on average 5% below the proposed formula target and 31 of the 37 are under target. However despite an adjustment for inequality, some of the most disadvantaged areas are probably not getting what they need (e.g.for liver disease) http://www.theguardian.com/society/2013/dec/30/liver-disease-deaths-starved-nhs-funds Note also that the Better Care Fund (BCF) (promoting integrated services for older and vulnerable people) will become operational in 2015-6 with expected funding of £3.8bn pooled from existing core committed funding within the Department of Health, the Department for Communities, Local Government, and CCGs. Over time this fund, to be overseen by local Health and Wellbeing Boards is intended to shift the balance of resources from the acute sector into primary, community and social care. However according to Sir David Nicholson "the fund does not in itself address the financial pressures faced by local authorities and CCGs in 2015/16, which remain very challenging" and "the requirements of the fund are likely to significantly exceed existing pooled budget arrangements. Councils and CCGs will, therefore, have to redirect funds from these activities to shared programmes that deliver better outcomes for individuals." Plans are supposed to be in place from February.