North Yorkshire’s health watchdog is to consider raising the alarm directly with Jeremy Hunt, the Health Secretary, about the sustainability of local NHS funding and the commissioning system.

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At its next meeting on Friday 22 June, North Yorkshire County Council’s scrutiny of health committee will discuss a local NHS report which sets out the precarious position of local NHS finances. The report shows a £46m total deficit for 2017-18 incurred by the four clinical commissioning groups that cover most of North Yorkshire’s population. The projected deficit for the current year is likely to amount to at least £31m.

Cllr Jim Clark, chair of the scrutiny of health committee, stated: “We are fearful for what this will mean for local NHS services. The recent news that more money will be allocated to the NHS by the Government is very welcome. However, the concern remains that the scale of the deficits that have been accumulating over the years will mean that as much as £150m may be needed for the health system locally to be brought back into balance”.

The projected savings that have to be made in 2018-19, as part of a long-term financial recovery plan for the county’s health services, include measures such as demand management, closer working between commissioners and providers, better management of workforce, a strategic review of estates and clinical services and work on management of prescribing.

The committee has previously been concerned that similar measures, intended to protect frontline services, would not be enough to make significant savings in year. As such, there remained a risk that some services would be rationed or stopped entirely.

“We recognise that these are really testing times for health services in the county,” councillor Clark added. “People are working really hard to deliver good quality services in the NHS but it seems as if the odds are stacked against them. The financial situation has deteriorated significantly over the past six years since 2012, when the total deficit for the primary care trust was around £20m”.

“Part of the problem is the way that funding for health services is calculated and how this disadvantages a rural county like North Yorkshire where people live longer with multiple health conditions.

“Part of the problem also is the way that health services are organised in the county. There are too many commissioning organisations and perverse incentives in the tariff system of health payments that set hospital provider against commissioner.

“There are those who feel that the additional funding may create more problems than it solves as it discourages NHS leaders from undertaking the necessary reforms of the health system that will ensure that it is sustainable in the longer term”.

A recent report by the external management consultants Price Waterhouse Coopers, commissioned by NHS England, stated that the clinical commissioning groups need to meet urgently with NHS England to ensure that there is the necessary capacity for them to continue and also to explore the creation of a single leadership team. It also indicates that in order to deliver both system transformation and financial balance successfully, closer partnership work is essential.