What happens if a practice has overspent their indicative budget at year-end?
Answer PCTs and practices should work together during the year to ensure that practice spend is regularly monitored. Regular monitoring will highlight potential problems early and a course of action should be agreed. Financial management must be seen as a year-round and not a year-end process. Any local incentive award should be dependent on practices not overspending their indicative budgets. Where practices persist in overspending, the PCT will wish to consider the practice contract to ensure that they are making the most effective use of health service resources. Where a practice is overspent at year-end then there should be a dialogue between PCT and practice to determine the reasons. In some cases it may simply be due to natural variation in demand for healthcare; overspends for this should be managed through risk management arrangements. In some cases, however, it may be appropriate to review the commissioning responsibilities that the practice have and the PCT may wish to offer
