Midlands – ICB roundup

November 2024

Birmingham and Solihull

Birmingham & Solihull has submitted a plan to break even in 2024/25 on the basis of delivering £220m of efficiencies. (p213)

But for the first two months of the year, the system was £32.3m deficit, £23.4m adrift of plan, with significant overspends on both provider pay and non-pay, partly offset by additional income.(p9)

By month 4 the system had a £51.4m deficit, £35.6m adrift, although the rate of griowth of the deficit appeared to be slowing. (p102)

Good progress had been made on continuing to reduce agency spend, but substantive and bank spend were exceeding planned levels.  The system delivered £47m of savings in the first 4 months of the year, just 73% of the planned target. (p102)

Reasons for the deficit include:

• Efficiencies – slippage on efficiencies.
• Substantive pay growth – Substantive pay exceeds plan by £23m year to date.
• Mental Health Pressures – continued impact of level/casemix of Out of Area beds (p108)

Black Country ICS

The July Board meeting heard that the system was planning to deliver a £119m deficit in 2024/25 including an ICB surplus of £34m: but NHS England had not accepted this and attempted to impose a control total of –£90m. (p20)

Black Country ICS was proceeding with their original deficit target, and was forecasting to hit the deficit plan at year end, although warning that “current performance trajectories suggest this will be challenging to achieve.” (p86)

The ICB carries additional pressure and the lead commissioner for the West midland Ambulance Service (WMAS). (p17)

By month 2 organisations were reporting a £40m deficit £3m adverse to plan. (p17)

By month 4 the system had a deficit of £80m (7.6% of turnover), £15m adverse to its financial plan – and £30m adrift of the control total set by NHS England. The ICS has been assessed by NHS England as being at high risk of overspending.

“With the support of NHS England, the system has engaged external support to urgently review the financial position of the system and develop interventions to mitigate risks and enable deliver the system plan. The first phase report is presented to the Board under separate cover.” (p90)

Despite monthly Finance and Workforce Assurance meetings with providers, at month 4 there had not been the expected reduction in workforce required to meet the plan. So the ICS People team has to focus on “workforce reductions and improved productivity,” meaning “engagement with the wider system partners including social care and voluntary sector is likely to reduce.”

The Black Country has seen a significant increase in UEC activity inflows since 2019/20 with a gap of over £30m between the level of contract funding associated with UEC and the value of this activity under pre-Covid Payment by Results (PBR) arrangements. The system has therefore been in discussions with neighbouring ICBs through the 2024/25 planning round to seek additional funding to reflect the increased costs of Black Country Trusts treating these patients.

Three out of the four systems approached have now agreed levels of funding, resulting in additional income of £25m for Trusts from Staffordshire and Stoke on Trent, Birmingham and Solihull, and Shropshire, Telford and Wrekin ICBs.  Discussions with Herefordshire and Worcestershire in respect of the contract gap of £2.6m ICB are ongoing. (p107)

Coventry  & Warwickshire

Unlike some other systems that are seeking to cut staff, Coventry & Warwickshire has a workforce shortage of close to 1000 full time across the System in its. But it also faces a severe financial situation, coming into the year with a £160m financial gap to close on a total system budget of just over £2bn. (p25)

The path to financial recovery was to be the focus of the September meeting, and:

“Some difficult decisions needed to be taken and their justification would need to be well articulated to patients and the community. The System was in a high-risk situation and preparation for detrimental consequences was required.”  (p25)

Plan for a £27m deficit submitted to NHS England In June, but discussions were ongoing with NHSE to try and meet a funded deficit control total of £20m. But CW is one of the more secretive ICSs, and so “Balance sheets and controls would be discussed in the confidential meeting to follow.” (p26)

By month 4 the deficit was £20.3m against a plan of £18.3m representing a variance to plan of £2m mainly as a result of industrial action costs in Quarter 1. (p92)

The ‘system wide people plan’ seems to be less of a plan than an aspiration. Despite its priority on transformation:

“the objectives within this priority are not particularly well defined and consequently progress and oversight of new roles, new ways of working and upskilling could be further developed.” (p114)

It seems more clarity and consistency is needed on the finances too. On page 128 the ICB reports that “The underlying pressures mean that the system has a planned deficit on £20m for 2024/25 even with a challenging efficiency requirement of c6%”. (p128)

But two pages further on the figures seem to be rather different: “The CW ICS Business as Usual (BAU) efficiency programme for 24/25 totals £124.5m or 5.2% of allocation.”

Another problem is that the efficiency plan only delivers 59% of the required efficiency target recurrently, and so pressures will continue into the next financial year. (p130)

The Medium Term Plan Review notes:

“The Finance and performance committee concluded from the various scenarios that the system status quo is unaffordable, without an allocation increase above the historic average of 3%, even with the system partners’ continued commitment to deliver a minimum of 4% Business as usual efficiency (BAUE) year on year and additional system transformation workstreams valued at c£27m above BAUE.”

“In order for the system to break even total expenditure would have to remain flat less 4% year on year efficiency for the full three years, in order for allocation growth over time to offset current cost pressures”

Given inflationary and demographic pressures “this is considered highly unlikely over that extended time period. …  the system as a whole is being asked to consider difficult decisions and prioritise expenditure in order to live within the funded allocation. (p137)

Derby & Derbyshire

JUCD (Joined Up Care Derbyshire) has submitted a 2024/25 financial plan to deliver a £50.0m deficit in line with the limit set by NHSE, underpinned by a 5% CIP across all organisations (£169.7m).(p79)

In the last financial year 2023/24 the system wound up with £59.8m deficit against an initial plan of break-even, despite delivering total system efficiencies of £134.7m (5.4% of system allocation). Just £59.0m (43.8%) if the efficiencies were recurrent, increasing the efficiency requirement for this and in future years. (p37)

In 2023/24 the workforce grew by 1,783 WTE (6.2%) to 30,463 WTE – 1,353 above the original plan. The ICB was warned that “The original 2023/24 plan had been to increase the workforce by just 430 WTE (1.5%). The levels of actual workforce growth above plan are not sustainable and further grip and control is required to deliver the 2024/25 plan.” (p37)

The 2024/25 Operational Plan aims to generate a reduction in WTEs of 3.6% (927 WTEs) across the system’s four Foundation Trusts. (p79)

However the total workforce across all areas (substantive, bank and agency) was 422.05 below plan at M4. A decrease of 50WTE substantive positions came with a bigger increase in bank (+166WTE) and agency usage (+17 WTE). …

“This position suggests that the vacancy and agency control processes which have been put in place are leading increased bank staff usage instead; this is being investigated further.”

But the future is looking bleak: “Assuming 24/25 delivers on plan, a shortfall of c£250m exists for 25/26 after application of NHSE funding/penalty regimes assuming a 3% CIP target.” (p81)

Delivery of efficiency savings remains the largest underlying risk for the system.

Hereford & Worcester

The ICS is working to a planned deficit of £80m, which requires efficiency savings of £118m. (page2)

The plan includes a full year deficit of £57m at Worcestershire Hospitals and £31m at Wyve Valley Trust, balanced by an £8.8m surplus for the ICB. Recovery plans are in place across all areas with oversight through the range of ICS programme boards. (p3)

However from a workforce perspective, the Month 4 position shows that recruitment of substantive posts is behind schedule across all providers, reflecting the challenges in the healthcare labour market. The bank usage is over plan, signalling a shift from agency to bank usage, in-line with the workforce strategy. (CEO report p2)

The financial position at month 4 was £3.7m adverse to plan, of which £0.65m was direct costs and loss of Elective Recovery Fund (ERF), linked to the recent Junior Doctors’ industrial action.

The remaining variance is linked to failure to deliver ‘efficiencies’, mainly in Wye Valley NHS Trust (WVT), together with “the year-to-date impact of a Private Finance Initiative (PFI) accounting change, which has not been reflected in the plan.” A Financial Recovery Board has been established at WVT to address the non-delivery of planned efficiencies and to identify new schemes. (p2)

The ICB argues that

“Whilst the identification of non-recurrent mitigations to off-set under-delivery is welcomed, this does present a further financial risk to future years financial plans; as such, further work is required to identify recurrent mitigations in the remaining months of 2024/25.” (p3)

Leicester, Leicestershire and Rutland

The LLR ICB system has an £80.0m deficit plan for 24/25. This is made up of £(64.9)m University Hospitals Leicester (UHL)  & £24.1m ICB, with Leicestershire Partnership Trust at break-even, plus a £9m system wide “stretch savings requirement”.

However the overall year-to-date (YTD) system position at month 5 is a deficit of £65.2m which is a £18.8m adverse variance to plan. (p281)

This follows from last year (2023/24) when the system’s reported financial performance was £68.4m deficit against an initial plan of a £10m deficit. … For financial performance management purposes, the applicable financial position was £78.4m deficit.

This was despite delivering total system efficiencies of £137.3m, (6% of system allocation). However just £45.9m (33.4%) of the total was recurrent, increasing the recurrent efficiency requirement in future years. Agency costs also increased, surpassing the plan by £8.4m and agency cap by £18.8m. (p52)

UHL have remained in the national Recovery Support Programme (RSP) and have undertakings in relation to finance in place and NHSE continue to work with the ICB and UHL to agree the Transition criteria to exit the RSP programme and oversight of delivery of their financial recovery plan. (p52)

The system has planned efficiencies of £173.6m, of which we are ahead of plan and currently forecasting full delivery, with £64.4m achieved year to date. Note over achievement and additional schemes are required to address the expenditure variance to date with existing cost overspends or income shortfalls. (p358)

Lincolnshire ICB Sept Board

The ICS’ plan is to deliver a break-even position against in year allocations and income for the full financial year, based on a full year cost improvement plan of £84.8m, on which it expects to break-even by the financial year-end. (p73)

At month three, while the ICB was is on plan, the system position is off plan by £2m. (p18)

In July the Board was advised that the finance report only included the highlights, with the more detailed document having been presented to and considered by the Finance and Resource Committee which was discussed at some length at its recent meeting the previous week.

By month 5 the ICS reported a deficit of £18.8m, a £3.6m adverse variance to the plan while the ICB  reported a year-to-date deficit of £2.1m – improved on the planned £3.7m deficit. (p72) £22.5m cost improvements had been delivered, against a plan of £20.9m – a £1.6m favourable variance to plan.

Lincolnshire may be doing well on the financial front, though their discussion of the detail behind closed doors must arouse suspicion. The ICB also wins the Lowdown’s October prize for ICB gobbledygook” – with a prize for any reader who can explain the meaning of this paragraph:

“The level of accuracy used in financial reporting for the ICB is informed by the materiality concept. A transaction can be material by the impact it has on the financial duties of the ICB, but also the reputational and legal implications for the ICB and its internal and external stakeholders. Where judgements and estimates have been made in the preparation of the financial statements, the concept of materiality has been used. However, it should be noted that the concept of materiality has not been applied to disclosures required by law and accounting guidance, precise figures have been used for these disclosures.” (p217)

Northamptonshire August Board papers

October Board papers show Northamptonshire aiming to deliver a £55m deficit by the end of the year, but reported lagging £12m behind plan at month 5. (p54)

The deficit of £42m at month 5 is down to all three trusts, Northampton General (£20.5m), Kettering General (£17.7m) and Northamptonshire Healthcare Foundation Trust (£3.7m) running bigger than planned deficits.

Last year (23/24) total system efficiencies delivered were £93.9m, a hefty 5.7% of system allocation, although 40% of this was non-recurrent, leaving a bigger problem for this year.

The Annual Assessment of the ICS warned that

“The original finance and workforce plans were not achieved for 2023/24. There is a need for increased ICB leadership in this area and for partners to work together collaboratively to balance financial sustainability, enforcing workforce controls, alongside the delivery of high-quality, safe services.

“Robust medium-term financial plans are necessary alongside short-term delivery assurances. This approach will need to be scaled up and accelerated to return the system to balance.” (p116)

The ICS is aiming for £90.5m of efficiency savings in 2024/25, of which £19.6m was still unidentified by month 5, and £42.5m is non-recurrent, stacking up more problems for next year. (p59)

Spending on agency staff is above target in both of the acute trusts but expected to level off. (p61)

Nottingham and Nottinghamshire

The system agreed to reduce its forecast deficit from £106m to an agreed control total of £100m, including Nottingham University Hospitals £51.6m, Sherwood Forest FT £14m and Nottinghamshire Healthcare £16.5m.

The deficit has brought with it an £8.2m deduction from the ICS capital allocation, making it “challenging” to deliver against system priorities.

There was considerable risk in the plan, particularly around the delivery of the required efficiency target of £251 million, and tighter control and grip measures and governance arrangements had been put in place to support delivery. (p29)

By month 4 the system had an actual deficit of £70.1 million, £2 million adverse to plan, but “remains on forecast to deliver the year end plan of £100 million deficit.”

Efficiency delivery was £11 million ahead of plan at month four with £54.5 million delivered to date. The planned efficiency forecast is to deliver £257 million savings, £2.6 million is unidentified at month end close.

The ICB itself is continuing to forecast to deliver the planned £17.8 million deficit, with key forecast overspending areas continuing healthcare (CHC) costs at £7.7 million, prescribing costs at £6.0 million and acute independent sector costs at £2.5 million.

The ICB financial plan requires £68.5 million of efficiencies. Year to date actual delivery is £21.6 million (31.5% of the required target). The latest risk adjusted year end forecast is estimated to be £54.1 million (78.9%). (p105)

The Nottingham and Nottinghamshire ICS is one of nine NHS systems nationally that has been required to commission a delivery partner to support delivery of the 2024/25 financial plan. The ICB has engaged P.A Consulting to undertake this work.

Phase one of this process has focussed on stress-testing plans to identify and quantify the key risks to delivery. (p108)

System partners were beginning to think more collaboratively in respect of matters such as vacancy controls, service review and decommissioning plans.

There was a commitment for organisations to work together in additional areas such as:

• consistency of approach to subsidised staff meals and car parking income
• reviewing high cost, low volume services for the potential for consolidation,
• seeking a collaborative solution to direct access pathology
• and identifying areas for back -office collaboration.
• Members were assured that progress had been made, but on the basis of current plans and evidence of delivery, the [Finance and Performance] Committee could not provide the Board with an assurance level higher than partial. (pp119-120)

Shropshire Telford and Wrekin

The ICS has a target of restricting its deficit to £90m in 2024/25, which requires delivery of an efficiency programme of £89.7m. £10.1m of these savings had not been identified in Month 2. (p72)

By month 5 the system deficit was £56.2m, £4.7m adverse to plan, but the forecast was still to deliver an £89.9m deficit – in line with plan.

However the system has reported risk to the value of £40.6m for which no mitigation is currently available and efforts continue to either reduce risk or find alternate mitigations if costs in excess of plan were to materialise

The two main performance pressures were finance and Urgent and Emergency Care (UEC).

Although there had been an improvement in 4-hour A&E, 12-hour breaches, ambulance offload delays, super stranded patients and Category 2 response time, and there was improving performance across mental health metrics, long waits are an issue. The system is not on track to deliver 65 week waits by the September 2024 deadline. Early indications are that the 78 week wait position has also deteriorated

Community waits exceeding 52 weeks are reported for the first time and cancer backlogs continue to increase. (P48)

The planned ramp up in efficiency savings in the latter part of the year makes the forecast becomes more challenging to deliver. (P72)

Staffordshire and Stoke-on-Trent

The ICS year end plan target deficit is £90m: however the system has assessed the position and highlighted £100 million of risks that are being worked through. The minutes of the September Board meeting confusingly report that

“the efficiency plan for the year is £203 million and with the additional work which has been undertaken over the past few weeks, this has increased to £180 million, which is still not enough, but is the highest the system has ever achieved.” (p13)

From this The Lowdown deduces that the target has been reduced to £180m. However this will be tough enough, after reports that the ICS overspent by £91 million on its £2.7 billion budget in 2023/24. (p22)

By month 5 the actual deficit was £63 million against a planned deficit of £37 million, £26 million adrift from the plan, and the financial position continued to be “very challenging.”  The bulk of the year-to-date variance to plan sits with the ICB (£15.1m) and University Hospital North Midlands (UHNM) (£11.4m).

The ICS has appointed a system Recovery Director, who reports to all four NHS Chief Executives across the system. Additional controls around payroll have also been put in place and “are working well in addition to increased control of non-pay spend and additional scrutiny of all non-pay costs.” (p13)

The main drivers for the deficit include efficiency slippage (£16.8m) industrial action (£3.9m) and Continuing Health Care (£4.5m). These are partially offset by Dental underspend (£2.7m) and other non-recurrent mitigations (£8.5m).

Led by the Turnaround Director, a “recovery plan” has been developed. The system is also required to commence weekly reporting as part of the investigation and intervention process. Work is underway to refresh the medium-term financial model where the focus on addressing the underlying financial pressure of c£200m through clinical models, productivity and demand management will be developed over the coming weeks. (p32)

• A large driver of the position is shortfall on the efficiency programme. The total plan of £203m has £51m reported as high risk as of month 5. Work is on-going to identify further schemes. Year to date there is slippage of £16.8m, with recovery actions the forecast full year slippage of £23.5m. This results in the need to go further to recover against the plan.
• The workforce numbers (substantive + bank + agency) were 24,378 in March and they have now fallen (end of August) to 24,156. Within that we have achieved a reduction in agency equivalent to 136 WTEs. Overall, the trend demonstrates the pay controls of organisations are impacting.

However it should be noted that the ICS non-pay overspending is MUCH higher than pay overspending; £17.6m compared with £1.9m across the system (p111)

To support improvement in 24/25 and beyond, a Demand Management Collaborative has been created with Chief Operating Officer (COO) Senior Responsible Officer (SRO) leadership. This collaborative will work with the Urgent and Emergency Care Portfolio to lead the development of a demand management plan across the system to identify areas for efficiency and to mitigate the identified bed deficit of 85 beds to agreed manageable levels.

Continued focus on the in-hospital improvement programme, and “right sizing” of medical capacity at UHNM, which unusually seems to mean expanding it rather than reducing;

“Funding was received in 23/24 for a modular unit at Royal Stoke University Hospitals, to establish a new Acute Medical Rapid Assessment Unit (AMRAU). This unit provides both additional assessment and bedded capacity at the Royal Stoke site. (p133)

System recovery includes: “Considering any further opportunities to repatriate patients from the Independent Sector to NHS Providers, while fully bearing in mind Patient Choice.” (p115)

October 2023

Birmingham & Solihull

The September Board papers show a month 4 position of £30.1m deficit, compared with a planned deficit of just £3.9m. The situation has significantly deteriorated since Month 3, when the deficit stood at £18.4m, compared with a target of £3.6m.

The Finance Report admits that plans for 73% of its target efficiency savings had been made, but of these only 53% (i.e. 38% of the total savings target) were to be delivered recurrently – stacking up major problems for next year. (p52)

The Board was told that as well as provider pay exceeding planned levels, and agency spending above NHS England’s cap (Agency usage has increased by over 68% (p65)), other key drivers of the deficit (“as in previous months”) include:

• Impact of efficiency delays – £11m variance YTD
• Industrial Action – direct cost £8.3m
• Temporary staffing pressures – these remain significant, with a total pay overspend of £41m for the year to date, of which £1.6m relates to under-achieved pay efficiencies and £8.3m direct cost of IA [Industrial Action]. Seeing increased fill rates and bank usage.
• MH [Mental Health] Pressures – continued impact for level/casemix of Out of Area beds. (p57)

Black Country ICB

September Board papers did not contain the expensive looking Auditors Annual Report from Grant Thornton, published in August, which was published separately on the ICB website, and discussed in surprisingly casual fashion by the Audit Committee (p144-5).

It notes that despite having achieved a break-even position last year:

“the system is planning a £68.8m deficit for 2023/24 “which is dependent on delivery of a challenging £211.4m efficiency plan.  … [of which] £144.1m (68.2%) was yet to be identified as at May 2023. The system underlying deficit for 2023/24 is £255.6 million.

Grant Thornton note that the target cost improvement plans for 2023/24 are equivalent to 8% of the whole system’s allocation – an extremely high target to aim at, but £82m of this (39%) is planned as “non-recurrent” measures, leaving a grim level of underlying deficit for 2024/25. (p13)

Worse still more than two thirds of the planned schemes (£142m) are rated red as high risk.

The report goes on to state that on the basis of the large and continuing underlying deficit “NHS England’s view is that the system is not financially viable.” (p14)

And it concludes with its Auditor’s Judgement: “Based on the work undertaken, we are not satisfied that the Integrated Care Board has proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources. We have therefore identified a significant weakness in arrangements.” (p22)

Grant Thornton’s Auditors Annual Report states:

“Reducing expenditure and increasing productivity is now the priority for all NHS bodies. Cost savings or productivity improvements will necessitate wholesale redesign of services to deliver savings at a scale not seen for some years.” (p15)

It reveals that “Details of the ICB’s Operational Plan submissions for 2023/24 were presented to the Private … Board meeting in March and May 2023,” (p16).

The BCICB’s Operational Plan has still not been published more widely, and few if any details have emerged on exactly what measures are being proposed and which services face “wholesale redesign” in efforts to balance the books. Keeping such information under wraps seems to be a deliberate policy.

By Month 4, BCICS was reporting a year to date deficit of £59m (6.4% of turnover), £19m adrift from the planned level required to deliver a £69m deficit by the end of the year (p104). The Board papers leave us none the wiser about how anybody expects or hopes that this position might improve, or what measures are proposed to bring spending back into line, other than the grim warning “The ICS financial position will require significant work during 2023/24.” (p147)

Coventry & Warwickshire

The ICB’s website is bizarrely located at https://www.happyhealthylives.uk.  July Board meeting heard that the ICB was £6.4m in deficit (and £3.7m adrift from plan) at month 2, and £10.4m in deficit (but just £3.2m adrift) at end of Month 3. The ICB was continuing to forecast break even for the year end. (p22)

However at the September Board meeting the Finance Committee report revealed that the ICB had a £10.7m year to date deficit (Month 4) which was £5.9m adverse to plan. (p78)

The Integrated Performance Report reveals a number of pressures within the reported position such as “Industrial Action, efficiency under delivery, acute sector inflation and agency usage. As well as pressures within the ICB around Primary Care, Pharmacy, Ophthalmic and Dental (POD).” (p83-84)

The University Hospital Coventry & Warwickshire was claiming to be still breaking even at month 4, with its “waste reduction programme” apparently “assumed to be delivered,” even though 37% of it (£21.4m) remains unidentified. Almost uniquely among NHS trusts, UHCW has assumed that the costs of strike action cost (£3.4m April – August) will somehow be mitigated by income from the Elective Recovery Fund. Additional risks such as inflationary pressures (£2m), and emergency pressures are assumed to continue, but are also effectively discounted, with the assumption spending “would be flexed to meet demand and subject to ICB demand management.” (p94-95)

The same happy-go-lucky attitude seems to have been adopted for the wider system efficiency savings, which at month 4 were reporting an underachievement of £7.8m. well over half (54%) of efficiency savings are non-Recurrent, with 19.7% of efficiencies were still unidentified. (p95) So even if the ICS scrapes through 2023/24 with a relatively small deficit compared with others, it is lining up an even bigger challenge as the underlying deficit rolls in to next year.

Derby and Derbyshire

This system, which likes to call itself “Joined Up Care Derbyshire” faced significant financial challenges in 2022/23 winding up with a financial deficit of £31.6m “due to expenditure outside of ICB’s control”, specifically:

– cost of living increases, impact of the national pay award and Covid-19 related costs

– Pressures in prescribing, continuing healthcare fast track packages to support hospital discharge and Section 117 in mental health cases (p48)

This year the prospects are no better: the deficit at Month 3 was £25.5m – £12.9m above the planned level, and the likely outcome was a deficit of £37.3m for 2023/24, although the “owrst case scenario” would be a deficit of £108.1m (p194).

Nonetheless the ICB is still hoping for the best, and forecasting a break-even, while noting “growing material risks:”

• The costs of industrial action
• Excess inflation impacting on CHC, prescribing and mental health
• Efficiency delivery
• Operational pressures
• ERF income due to lower elective activity affected by industrial action (p185)

There is a warning that the consequence of lower ERF income could be “the acute providers could run out of cash before the year end,” and that (for reasons not explained) “The financial position does not include the costs of meeting the unfunded pay award deficit of £13m.” (p185)

The Finance and Estates Committee report tucked away towards the bottom of the Board papers reported that at the end of Month 4 £50m of the target of £136m efficiency savings had still not even been identified, and of those that had been delivered less than half (47%) were recurrent, stacking up more problems for next year.

As a result “It was ultimately acknowledged that the programme delivery boards are not delivering the financial agenda, meaning a rethink of our approach to system wide financial transformation is necessary.” (p238)

Some of the ‘savings’ that are planned represent a gamble with safety and availability of patient care:

“All Trusts are making a concerted effort to reduce agency usage and spend. It has been agreed that there will be no agency usage to cover industrial action from Month 5 and therefore there should be a corresponding reduction on that basis. It is important to note that this approach, however, will create increased risks in relation to elective recovery and potentially patient safety.” (p159)

Derby & Derbyshire remains 183 Whole Time Equivalent posts short of planned staffing levels even after recruiting 277 staff to substantive posts. To cover the gaps there has been an increased use of bank staff, and a much (54%) higher than planned use of agency staff, even though absolute numbers of agency staff have ben reduced.

Herefordshire & Worcestershire

Herefordshire & Worcestershire Integrated Care System (ICS) submitted a “collective stretched deficit plan” aimed at limiting the deficit to £19.2m for the financial year 2023/24. This assumed  £73.1m of efficiencies would be recurrently delivered, with agency expenditure limited no more than £51.2m. (p2)

By Month 4, the system was £9.4m adrift of its target – a £2.8m ICB “adverse variance” and Worcestershire Acute Hospitals NHS Trust (WAHT) £6.4m worse than target at £13.6m deficit. The full year plan astonishingly projects WAHT to break even, while Herefordshire’s Wye Valley Trust was expected to end the year £22m in deficit.

“The board is asked to note that this is becoming increasingly challenging for all … organisations, with the impact of the industrial action (both in terms of cost and capacity), excess inflationary pressures materialising, slippage in delivering efficiency plans and insourcing costs to meet waiting list targets.”

In response to this challenging situation, the Board is promised action … in two months:

“A deep dive across the four organisations reviewing the risks and mitigations to delivery of the planned deficit of £19.2m will be undertaken and reported at Month 6.” (p2)

Board members were told in its July meeting that “the plan is to utilise the independent sector further,” although nobody seemed quite certain about the details of the plan or its cost … or whether it is really a plan at all:

“A plan is in place that is currently around 120% of 2019/2020 activity delivery for the independent sector and, at the moment, part of this is funded through the baseline that was set for the 2023/2024 plans.

“… The initial assumption is that the independent sector are ahead of plan, which indicates that they are undertaking the work and bringing the backlog down as required, but there is now a need to work through and ensure that funding flows to cover that cost.

“Assurance was given that a plan has been built in at this stage.” (p15)

Leicester, Leicestershire and Rutland (LLR) ICB

The month 3 ICS deficit was £25.7m (of which University Hospitals Leicester (UHL) were reporting a £21.9m deficit and the ICB £3.1m), representing a £10.4m adverse variance to plan (p13).

This has rapidly worsened to a Month 5 deficit of £51.6m which is a £31.8m worse than planned.

UHL alone now reports a latest deficit of £36m (£17m adverse variance to plan), while the ICB itself is admitting to a £14.8m deficit (£14.8m adverse variance to plan) – blamed largely on an increase in prescribing costs.

Despite “all system partners … taking action to mitigate risks, strengthening financial controls and delivering increasing levels of financial efficiency as the year progresses,” reality is staring them in the face:

“Given the financial pressures being experienced related to inflation, industrial action, demand and prescribing costs, there is a risk that the ICS may be unable to achieve the £10m planned deficit.” (p318)

Despite the financial pressures spending on independent providers is running high. Asked by a member of the public whether private hospital services might be used to speed treatment of cancer patients, for which University of Leicester NHS Trust ranks 124th out of 141 trusts in England, the answer was that:

“LLR had seen an increase of 171% in independent sector activity in 2022 to 2023 compared to 2019 to 2020 levels. There was a plan for 2023 to 2024 activity levels to reach 185%. Independent sector capacity for cancer treatment was limited but the ICB would continue to explore all clinically appropriate options.” (p6)

Lincolnshire ICB

Despite early financial hopes that the Lincolnshire system was on track “to deliver the Quarter One financial position for the first quarter of the year, and ensure the system “remained on track to meet the criteria to exit Segment Four [the most challenged status] of the NHS National Oversight Framework,” (p19) the situation has worsened.

The ICS reported a deficit of £29.7m at the end of August, £5.1m worse than planned.(p84)

Over the course of the year, very significant additional pressure are arising as a result of industrial action, prescribing and the cost of individual packages of care. The ICB and its partners are seeking to close this net risk position. (p85)

Because no specific measures have been revealed and no details are given, it’s impossible to judge how far this is being done, and if so why Lincolnshire, after years of chronic financial problems should now be one of very few ICBs in the country to have ridden through all the problems virtually unscathed.

Northamptonshire ICB

As early as Month 3 the Northamptonshire ICS had a deficit of £15.9m – more than double the planned level of £7.5m:

“The main drivers of this deficit were the under delivery of efficiency savings, and inflationary pressures above national assumptions, especially in Continuing Healthcare, with complexity, cost and number of packages rising significantly. Cost pressures from Prescribing, the pay award, and costs associated with the industrial strike action also were contributing to the deficit.” (p10)

By Month 5 this had worsened to a £32.2m system deficit, almost four times the planned level of £8.2m. (p143) Each of the trusts was running worse than plan, plus the biggest shortfall against plan was the ICB itself £8.9m worse than planned. (p149)

The System is forecasting to achieve breakeven at the end of the financial year, but currently reporting potential risks after mitigation of £72.6m, largely reflecting excess inflation and additional pressures, industrial action and a shortfall on efficiency delivery. (Highest unmitigated risks inflation in prescribing (£15,824), and failure to deliver efficiency savings (£17,882) (p160)

The ICB has flagged up concerns over the unknown impact of the National Patient Choice Programme, announced by Rishi Sunak in May, which takes effect from October 31.

The ICB’s Delivery and Performance Committee was warned last month that the NPCP could mean as many as 3,000 Northamptonshire patients could be “on the move,” raising questions about depleting budgets of local trusts and unplanned increases in spending on private providers.

The scheme “would enable patients who had been waiting for 40 weeks or more, and met the require clinical and pathway criteria, to request to be referred to another Provider anywhere in the country who had a Commissioning Contract with NHS England or any Integrated Care Board for the required service.

“Patients could access the service via the Patient Initiated Digital Mutual Aid System (PIDMAS) and it was anticipated that Northamptonshire could see as many as 3000 patients on the move. … The National infrastructure to support this was not yet in place and accordingly the Committee reported limited assurance in terms of process and capacity.” (p167)

Nottingham & Nottinghamshire ICB

The ICB plunged swiftly into deficit in 2023/24: “At the end of month two, the NHS system had reported a £29.5 million deficit position, which was £18.9 million adverse to plan.”(p19)

But the pace of increase in the deficit does appear to have slowed, and at the end of month four, the NHS system reported a £41.6 million deficit position, £27.6 million adverse to plan. (p157)

All partners continue to forecast to achieve break-even, despite “significant risk,” with “unmitigated financial risk” estimated at £78.8m. … Key risks include inflation, efficiency, urgent care pressures, elective recovery and CDC [Community Diagnostic Centres] income. (p274)

“Good progress” has been made in the development of efficiency savings plans with a target of £192.8m, of which £177m is now recognised as fully developed or in progress.”

But actual progress is slower: “only 15% of the annual target has been delivered at the end of month 4,” and problems are being stacked up for next year, because “less than half of year to date delivery is recurrent.” (p276)

There is a grim warning about the quality of some private sector provision, with “an increase in the reporting of post operative infections relating to private provider procedures resulting in patients being admitted to NUHT.” (p245)

However the System is “Fully utilising Independent Sector capacity and identifying mutual aid potential across NHS Providers where clinically appropriate2 (p262), and Nottingham University Hospitals reports independent sector activity £1.2m above planned levels (p275)

Shropshire Telford & Wrekin

This chronically challenged ICB has lurched from a £4m adverse variance to plan (£22.9m deficit against a £18.9m deficit plan at month 2 (p17) to a £59.2m deficit, (£23.1m adverse to plan) in month 5.

This is just short of the final system finance plan for a £60m system deficit over the whole year, as submitted to NHS England on May 4 (p90-91), with the system still “awaiting a formal letter from NHS England to recognise that plan.”

Nonetheless the system is still reporting “forecast delivery of the plan but with significant unmitigated risk of £81.8m.” (p51)

Some of the problems centre on adequate arrangements and capacity to discharge patients requiring additional care after discharge and the Finance Committee had undertaken a ‘deep dive’ into discharge and escalation and, in particular, reviewed the activity and funding mechanisms with the Local Authorities. It noted that “all available recurrent funding has been deployed in the finance plan in support of the existing discharge services.”

The current funding levels had been deemed insufficient for capacity required this year, and work was underway to “scope that” and “develop mitigations.” Committee Chair Trevor McMillan “expressed concern that if an agreeable solution is not found between NHS and Local Authority partners this would have a severe impact on the Trust’s ability to discharge patients.” (p95)

Such are the scale and variety of problems confronting the ICB that they appear to have brought in a private management consultant, although what they actually say is that they have

“engaged a strategic partner that specialises in organisational development to support in the delivery of the programme within timeframes. This is currently subject to both strict procurement rules and requiring NHSE sign off. As a result, this cannot be discussed in detail.”

Although the arrangement seems to have been made it is discussed in the future tense as the complex challenge is spelled out:

“The successful provider will have specific experience, skill and expertise around large scale organisational and system redesign, programme management at pace, driving cost efficiency, coupled with professional maturity to deliver on this challenge. They will support in a structured yet timely way through diagnostic, design and implementation phases to develop and implement this programme which will enhance maturity and employment experience for our workforce at all levels.” (p74)

Exactly who this may be, how much they cost and what plans they may hatch up we can only guess. We (and local communities across the ICB who depend on health care) will have to wait and see if anything is divulged, or if the “partnership” is restricted to private meetings with ICB directors and provider chief executives.

Staffordshire and Stoke-on-Trent ICB

The October Board meeting heard of the worsening ICS financial situation (a year-to-date deficit position of £58.6m at month 5, which is a £45.0m adverse variance against the £13.6m deficit plan (compared with a month 4 deficit of £48.7m, £34.1m adrift from the plan).

It noted that:

“The drivers behind this adverse position are slippage on efficiency programmes, the ongoing retention of escalation beds due to urgent and emergency care (UEC) demands, continued health care (CHC) and prescribing inflationary pressures, alongside the Industrial Action that has taken place across the year.”

And unusually the Board took the decision to face facts and stop pretending they can magic away the growing deficits by the end of the year:

“Whilst we are still reporting a forecasted breakeven position, we have completed a thorough review, assessing the run rate, the remaining plan and the risks and mitigations, concluding as a System that we no longer think we can hit a breakeven position at year end as the risk incorporated into our financial plan are realising within the year-to-date position.” (p19)

“After much conversation and thought, we decided to plan for a break-even position in 2023/24, recognising that it is our statutory duty to do so. In agreeing to this plan, we signalled clearly to all parties that it would require a best-case outcome across a range of assumptions.

“Unfortunately, that best case scenario has not played out.

“Most significantly, we have seen excess inflation (inflation above that funded through allocations) of £50m. We’ve also seen the continuation of the trend of recent years where patients requiring Continuing Health Care (CHC) has grown markedly.

“In addition, there have been unforeseen costs of industrial action and further pressures on the acute and mental health care sector. These pressures are mirrored within the local authorities who are also experiencing financial challenge.” (p31)

The conclusion is stark – a hefty deficit forecast this year and much worse again for next year:

“We have concluded that without further action, the NHS partners in the system face a collective deficit of £141m for 2023/24, coupled with a deterioration in our underlying position (ULP) to £237.7m. (p27)

As a result, the ICB has set “the target to save £100m from CHC [Continuing Health Care] in a full year, which if achieved would mean that we spend closer to the average across the Region. However, there is long lead in time before we see that full year effect, and unfortunately it is too late for this to eliminate the outstanding projected deficit that we face. (p27-28)

As at month 5 the full year forecast [CHC] spend is circa £256m before the actions set out in the recovery plan. This has increased from £196m in 2022/23. (p34)

This helps set the scene for a System Recovery Plan focused on the “Big Ticket 7” themes, covering Management of CHC, Integrated Discharge, Admission Avoidance, Care Homes, Falls, Severe Frailty and End of Life and the underpinning projects.  (p27)

It’s fair to say that in any other context than the desperate quest for large scale financial savings the proposals in the Recovery Plan could be viewed in a much more favourable light. But the focus on cash savings winds up with some uncomfortable ideas, not least the grisly phrase

“• Turbo charge end of life programme and link into care planning for elderly and frail people,” which appears to propose accelerating the demise of patients to save money. (p39)

Suspicions mount when we find that end of life patients are to be included on a “fast track” to reduce length of stay, or as the System Improvement Plan puts it:

“Improving the experience and timeliness of support for individuals who are end of life and eligible for fast track.” (p40)

The same table states that a key aim is “Reduction in the average LOS [Length of Stay] for Fast Track patients to 12 weeks or less.”

The ‘Financial Opportunities from CHC’ table on page 48 also fails to offer reassurance that the end of life of some patients is not to be hastened in the hopes of saving the ICS £6m per year:

“The average length of stay of fast track over the target of 12 weeks is currently 36 weeks. It should be offered when end of life is expected within 12 weeks. This cohort of patients should be on FNC [NHS-funded nursing care] care until they reach that EOL status.”

While this may just be awkward and insensitive wording, concerns will not be allayed by the follow-up proposal for what seems like expanding the list of patients officially branded as at death’s door, but is in reality passing more care from hospitals (and trust budgets) to GPs, where it is assumed to be effectively free:

“• Increase in patients identified as EoL [End of Life] on GP registers with improved MDT [Multi Disciplinary Team] management”

To deal with this enlarged list of terminal patients, there is what seems a profoundly ambiguous plan:

“• Offer of 18 additional hospice beds and 200hrs domiciliary care to support urgent and emergency care flow.”

It’s not clear who is to provide the hospice beds (not normally delivered by the NHS), and no expansion of hospice care is proposed in the 5-year Operational Plan, so this seems to be a commitment that is unlikely to be delivered.

Nor is it clear whether the apparently random number of 200 hours of domiciliary care is an annual total to cover all patients, an allocation per end of life patient, or a specific allocation to cover the additional people added to the EoL list to be cared for by GPs. It is equally unclear whether this domiciliary care would be part of existing (normally privatised) services commissioned by the local authority (and thus potentially subject to means-tested charges) or new, dedicated services to be delivered by the NHS.

And while developing alternatives to hospital admission and avoiding A&E admissions where possible for end of life patients is a worthy ambition, it feels uncomfortable to read the plan for what could be seen as a deliberate bottle neck in the system for frail elderly patients:

“• Single point of access for admissions avoidance, to cover support for clinicians as well as development of rapid response services.” (p39)

It’s obvious that the ICS faces massive financial and organisational problems, and its System Recovery Plan does seem, awkward wording aside, to be aiming to improve the services for older patients outside of hospital in order to deliver a better as well as a cheaper service – although a target of £100m savings is a massive challenge.

However the most important lack of clarity, which questions the achievability and viability of the Recovery Plan, is the complete absence of any costings for the service improvements and new services that would need to be put in place. The proposals are only discussed in terms of the number of beds that could be released and the potential saving:

Future growth avoided              £20m

One to one packages                 £14m

Fast Track                                 £6m

High Cost patients                     £44m

Numbers of CHC patients          £25m

Total                             £109m (p48)

But these savings are only achievable through expansion of alternative services, NHS and social care, which have a cost that is completely ignored. Only when and if the savings exceed the extra costs is there a genuine saving, and only when the ICS has the resources to invest up front can any expanded or new services be established.

The current standpoint of NHS England, in targeting any limited extra funds only at the systems that are already performing best and most nearly in financial balance suggests that little extra cash is likely to be coming to Staffordshire and Stoke on Trent.

The Recovery Plan promises more detail in Appendices, although these are not attached to the document, and what seem to be hyperlinks to them do not work.

It is possible, in the absence of any other information, that they are the Appendices to the ICS Joint Forward Plan 2023-28. However neither that Plan nor its Appendices include any costings (other than a discussion of minor capital investments, which are not defined or related to the System Recovery Plan).

Without costings and identifying the source of the necessary funding, and a proper audit of the staffing requirements to make the new proposals work, the Recovery Plan is not a proper plan at all, simply a list of areas where the ICS wishes to cut spending. It’s not clear how far down this road the ICS will travel before hitting that wall of financial affordability.

Without extra funds up front even the most promising schemes cannot progress.

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