An authority which funds health services in West Norfolk could lose its powers if it fails to turn around its £10m deficit.
Paul Williams, chairman of West Norfolk Clinical Commissioning Group (CCG), said, in a letter to GP practices last week, that its financial situation is “dire”.
Dr Williams said the CCG, which commissions hospital and community NHS services, has a statutory duty to break even, and although it has previously managed this, it has since “become apparent that last year was not the same as the previous years”.
“In order to reach that position it seems some unreasonable assumptions had been made over several months and a significant amount of money had been used which was non-recurring and for which no provision was made in this year’s accounts,” Dr Williams added.
“This year, because budgets were set without taking account of that deficit, and no allowance was made to pay back that deficit, the situation is catastrophically worse.”
The letter states that the CCG is heading for an overspend of about £10m as well as the £7.8m from last year, but a CCG spokesman said this was incorrect and the total deficit for 2017/2018 is £10m.
As a result of the “poor financial position”, Dr Williams said he and other CCG officials faced a “star chamber of NHS executives” last week.
“The regional director, Dr Paul Watson, was the lead inquisitor alongside three other NHSE (NHS England) big wigs.
“At the end of the meeting we were left in no doubt that unless we immediately start reducing expenditure then NHSE would not hesitate to disempower the governing body and current executives and send in managers under legal directions to turn things around.
“They would have little regard for the long term consequences of their actions, their prime imperative would be to simply save money.”
Dr Williams said the CCG has three weeks to come up with a plan to turn things around.
He said the process “will not be easy” but is necessary to “transform the NHS in West Norfolk”.
“Please be assured the current CCG executive and governing body value the contribution local GPs make to NHS services in West Norfolk and are still committed to supporting West Norfolk Health develop into the provider organisation we feel is needed to transform NHS services to make them fit for purpose as the 21st century unfolds.”
Following the news, the authority has said it is “immensely disappointed” but is “working hard” to turn the projected deficit around.
A spokesman for the CCG said it will be looking into the effectiveness of Locally Commissioned Services.
He said: “The CCG is immensely disappointed to find itself heading towards a significant overspend. All of this money has been spent on patient care, benefitting local people.
“New management at the CCG is working hard to turn around the projected deficit.”
The spokesman said the letter sent to GP practices sets out the “worst case scenario” but no payments to practices have been reduced, and the CCG is not proposing to reduce Locally Commissioned Services in this financial year.
“The CCG will review all Locally Commissioned Services for 2018/19. We shall want to look at their effectiveness, to make sure that every pound we spend delivers maximum quality and value for money.
“If any LCSs are changed, core GP services will not be affected.”
He said it is “vital” to stress that every part of the NHS must make financial savings and efficiencies, and the CCG has a duty to remain within its budget.
“West Norfolk takes a responsible approach to this. We have put in place transformations that make savings and also improve patient care, such as a virtual ward and care home matrons to keep people safe and well in their homes, and reducing the use of expensive medicines when there are equally effective and less expensive versions,” he added.
“We shall continue this efficiency drive across all areas of the NHS to deliver maximum efficiency and maximum quality of care and reduce the deficit we face.”