Learn from historical deficits to prepare for future financial challenge, says new Nuffield Trust report


This new report from the Nuffield Trust is the first output of a project developed with the Audit Commission and NHS Confederation.  This first output is the result of qualitative research to capture learning from earlier periods of financial deficit within the NHS, with a view to preparing for the financial challenges ahead.  The second output, planned for spring 2014, is a quantitative analysis exploring association between contextual factors and financial performance.

For this work, the research team identified 6 NHS health economies in which at least one organisation was in turnaround during 2006; they undertook a rapid review of key documents to build up a picture of the health economies and then identified and interviewed senior leaders involved in managing the deficits.  The information gathered has been collated and analysed to extract 10 key lessons for CCGs:

  1. Identify and assess the reasons for financial problems as they arise and avoid  attributing difficulties solely to external pressures (for example, resource allocation, over which there is little control.    Participants discussed the impact of local context on allocations and of national policies on financial balance, suggesting that time spent to understand these in more detail was of benefit.  The report authors suggest a key role for commissioning support services in helping CCGs frame problems.
  2. Strive for strong and stable leadership to ensure consistency and aid development of relationships – although some level of change, if well timed and well managed, can bring fresh ideas and momentum.  Stability was highlighted by some respondents who shared experiences where lack of stability had impacted greatly on financial balance; however, there is a risk of complacency if new ideas and perspectives are not available.
  3. People talking

    Communication and collaboration are key

    Foster constructive relationships between providers and commissioners, while being mindful of the dual roles of competition and cooperation.   The importance of tackling issues at a health economy level was emphasised during interviews, stressing the need for a shared understanding of underlying problems and a shared vision and plan.  Participants shared experiences of difficult relationships which were “cosy” or “antagonistic” suggesting a balance where “tension and challenge” are seen as healthy.

  4. Work together with other CCGs to ensure financial risks are managed effectively – this may involve developing a complex matrix of commissioning arrangements.  This was felt to be particularly relevant for complex and large-scale services and issues such as community and social care.  The timing of collaboration was noted as several participants suggested they were too late in starting conversations.
  5. Invest in management capacity and capability, whether provided in-house or bought in from commissioning support units or elsewhere, to ensure internal governance and financial processes are efficient and effective.   Those organisations which were more successful in achieving financial balance had invested more in the use of data and systems to get to grips with underlying problems.  Participants expressed a need for more real time data for decision making.
  6. Ensure that where support and input are purchased from external suppliers that CCG members are involved in the process and feel they own the resulting plans and strategies.  Participants shared mixed views on the success of bringing in external support with some suggesting that an external individual “helped to bridge barriers between commissioners and providers” whereas others felt a reliance on external support resulted in low local ownership.
  7. Invest considerable effort in engaging with members of constituent practices to ensure GPs fully understand the role they play in the financial health of their CCG, and feel that they have ownership and influence.  Participants expressed differing views on engagement with GPs but some of the learning shared concerned culture change and breaking down norms which may have built over time and which may have contributed to problems.  Communication was emphasised in order to improve understanding of different perspectives and to encourage shared ownership of financial problems and solutions.
  8. Engage with the public (this will be critical when difficult decisions need to be made, particularly about service closures) and take other health and social care organisations along with any major change to ensure they are managed effectively.  Participants acknowledged the time involved to do this well is significant but suggested that it can be beneficial to improving understanding of financial problems and subsequent decisions.
  9. Organisational development, although important, should be balanced with an outward-facing, strategic, whole-economy perspective.  Participants shared the importance of “housekeeping” – improving internal processes, structures and systems – but sounded a note of caution around doing this to the exclusion of externally-facing activities such as communication and engagement.
  10. Develop a long-term financial strategy as well as dealing with immediate pressures. The financial health of CCGs will depend, in some cases, on significant service change, which requires strategic thinking.  Participants expressed some concern that a culture of short-termism, driven in part by external pressures, may have drawn attention away from a longer-term view and it would appear that those organisations who were more successful in achieving financial balance did seem to demonstrate a more strategic rather than operational focus.
One of the key lessons for CCGs is a long-term strategic focus

One of the key lessons for CCGs is a long-term strategic focus

The research team share their process for selecting the 6 health economies which was designed to achieve a relatively representative spread.  With regards to the qualitative methodology, there are some obvious limitations (which are acknowledged) to the use of interviews: for example, interview responses are obviously subjective and there are some conflicting and strong views expressed; time and resource limits meant they were not always able to track down individuals; and the research is dependent on individuals’ recall of events up to 7 years ago.  However, the team did attempt to validate their findings through a search of the literature and using a workshop at the NHS Confederation conference.

Commissioners will find this an interesting and timely report.  There is some useful learning here for how CCGs approach the continued austerity and financial pressures being forecast.  Notably, commissioners may wish to think about:

  • how they work in partnership with member practices to develop a shared understanding of financial pinch points and make decisions;
  • what needs to be done to build/ maintain/sustain constructive relationships with providers, health and wellbeing boards, HealthWatch, public health, social care, local area teams and others within the local health economy to address some of the larger and more complex issues;
  • what support they will need to better understand underlying issues and the impact of national policies and local context on financial balance;
  • what issues will benefit from a collaborative effort with other CCGs and commissioners.


Curry N et al (2013).  Managing financial difficulties in health economies: lessons for clinical commissioning groups, Nuffield Trust.  http://www.nuffieldtrust.org.uk/publications/managing-financial-difficulties-health-economies-lessons-clinical-commissioning-groups

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Alison Turner

I'm Head of the Evidence Analysis team within the Strategy Unit at NHS Midlands and Lancashire Commissioning Support Unit. I'm interested in how knowledge management can support value based healthcare and evidence based decision making. I've previously worked in a range of different healthcare settings, including acute care, commissioning, health services research and medical education. More recently, I worked at NHS Evidence and NHS Institute for Innovation and Improvement.

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