East of England

Bedford, Luton and Milton Keynes

The Integrated Care System (ICS) had submitted a plan to NHS England projecting a balanced budget (break even)for 2024/25 (p21), one of the few systems in the country to do this.

However, this requires “efficiencies” of just over 6% at £106m, with “unmitigated risks” of around £55m.

However, by month 2, the system was £3.4m adverse to plan, and at month 3, that increased again to £6m off plan. The ICB blames “premium staffing costs” and loss of income for the deficit for the first three months of the year.

By Month 4 (July) NHS organisations hosted within the system were reporting a £9.1m deficit year to date, but forecasting break-even against plan for the year.  However, the ICB was warned that

“Without action, the system will deliver a year-end deficit, not least because of the still “unmitigated risk of £55.7m,” and new financial risks that had emerged, including industrial action, enduring Urgent and Emergency Care (UEC) pressures, investment required following recent CQC findings, and the premium costs required to support delivery of the 65week wait performance target. (p114)

Cambridgeshire and Peterborough

The system year-to-date position reported at month 4 was a deficit of £10.4m against a planned deficit for this period of £2.4m, resulting in a variance from plan of £8m – attributed to £3.8m of prescribing pressures within the ICB and £4.5m of Industrial Action costs across providers. (Page 3)

The system is forecasting a break-even position by the end of the year, assuming Industrial Action costs are covered by national funding. The incentive to break even is the promise of additional capital and revenue for 2025/26.

The C&PICB plan requires £135.6m of “efficiencies”, and assumes no monetary or activity impact of industrial action. There will be no mitigations for inflation above national planning guidance levels

The ICB forecast is a breakeven position for the ICS, to be achieved through “increased robust grip and control measures” alongside “assured delivery of the efficiency plan with additional efficiencies being identified.” (p39)

However, by July, total system efficiencies were £4.3m behind plan and forecast to underdeliver by £2.1m on the £136m plan.

Hertfordshire and West Essex

At the July ICB meeting, the ICB was told that the ICS had projected a £20m deficit by year end (31 March 2025), but this position had deteriorated. By month 2, the actual deficit of £16.4m was £3.7m above the forecast level, but by month 3, this had worsened to an actual £27m deficit, 42% higher than the forecast £19m.

To achieve the agreed £20m deficit by year end, in addition to meeting all planned efficiencies, providers must continue to increase elective capacity; this will increase earnings.

Continuing Health Care (CHC) remained a large cost area, and an improvement plan would be drawn up with local authority colleagues to address this. (p15)

Efficiency targets would be “challenging” for all providers to achieve. HWE was one of eleven ICSs who had been “put on notice” by NHSE; work was in hand to respond to requests for further information on actual vs. budget.

Pressures on beds within mental health services were highlighted. Within Hertfordshire Partnership FT, a temporary ward closure had reduced beds by 20%, which led to a number of patients being placed out of county for their inpatient care and increased costs materially over the period.

The ICS financial risk level is red-rated. The System’s control total deficit for 2024/25 is £20m, so it needs to deliver 5% efficiency, productivity, and/or cost savings.

However, not all savings are fully identified, and there is an unresolved risk to delivery currently assessed at c£20m – more than 0.5% of the ICB’s budget. Budgetary control is via a ‘triple-lock’ framework which requires expenditure in scope to be second/third approved by ICB and NHSE.

At Month 4, Hertfordshire and West Essex (HWE) Integrated Care System (ICS) reported a deficit position of £25.7m, which is £6m behind plan. (p152)

Mid and South Essex

The ICB’s July meeting was told that the finance plan for 2024/25 was to deliver the agreed deficit of £96 million for the system (made up of an £85 million deficit within acute services and £11 million deficit across community and mental health services). (p12)

The year-to-date position was “challenged”, predominantly in Continuing Health Care (CHC) services, which has a wide-reaching efficiency programme, no details of which are given. There were variances in volume and price, and a step change in demand, particularly the packages for patients on the ‘discharge to assess pathway’.

Staff car parking had been reviewed, and charges for staff were reinstated. The trust had promised that it would fulfil a range of (undisclosed) initiatives to reduce its financial deficit, which were underway. (p14-15)

MSE ICB had committed £3.55m recurrently to support the reduction of health inequalities

“in addition to the work being undertaken to ensure health inequalities are addressed in commissioning, contracting reviews and decision making regarding universal access to services.”

However, in 2024/25, this was reduced by a £1.35m “one-off contribution” from this health inequalities budget to the system’s financial deficit position.(p19)

The system delivered a deficit of £27.2m in 2023/24: Mid and South Essex NHS Foundation Trust and Essex Partnership University NHS Foundation Trust both failed to meet their financial objectives, and £70.5m (59%) of its £119.7m “efficiencies” were delivered on a non-recurrent basis, contributing, in part, to the financial shortfall in 2024/25.

For 2024/25, the system’s deficit plan of £96m (3.6% of allocation) requires £154.8m of efficiency savings (5.8% of ICB allocation) – and faces “additional net risks” of £79.8m (a further 3% of allocation).

The providers have planned to reduce agency costs by a challenging £49.8m and Bank costs by a further £60.8m between 2023/24 and 2024/25. (p128)

The ICS plan is considered to be “very stretching for 2024/25, however it is imperative we deliver so we can continue to build a strong foundation for financial recovery over the medium term.” (p137)

By month 4 the system position was a deficit of £62.3m, off plan by £16.2m as a result of “ongoing cost pressures and a shortfall in system efficiency programme delivery.” (p139)

The whole system continues to operate in ‘Triple Lock,’ with regional oversight of expenditure items greater than £25k.

At month 4 the system had delivered just £27.4m of efficiencies against a year-to-date plan of £36.8m (almost 25% adrift). (p140)

Norfolk Suffolk and Waveney

The ICB, chaired by former New Labour Health Secretary Patricia Hewitt, is facing a series of very substantial financial problems as revealed in September Board papers.

The Board papers ramble around, citing apparently contradictory figures, with no clear statement of plan and efficiency target until page 396-400!

The information is actually given backwards, with a discussion of the financial risks (£51.3m reducing to £32.7m) (p396) preceding the clear statement of the plan agreed by NHS England, for a £21m deficit in 2024/25 (p399) and the assumed level of efficiency savings required (£178.9m) (p400)

By month 5 the ICS was falling behind its plan, with a £37.8m deficit –“£17.6m adverse against plan.”

The trust’s underlying position is worse than the £65.1m deficit at the end of 2023/24. The underlying deficit for 2024/25 had risen from a planned level of £101.8m to £122.3m. (p396)

Local providers apparently have various Cost Improvement Programme (CIP) schemes that are behind plan, but “All are expected to recover during the year.”

The challenging financial environment continued to have a profound effect. Inherent risks include:

• not fully delivering the efficiency plan,
• our reliance on non-recurrent measures to address recurrent expenditure increases,
• the scale of the elective recovery programme,
• the high volumes of patients classified as No-Criteria-to Reside, impacting on patient flow and requiring additional bed capacity,
• the requirement to deliver a 20% reduction in central management costs in-year
• and the significant and deteriorating underlying deficit as a result of non-recurrent mitigations. (p158)

The ICB is also part of the ‘Triple Lock’ process with self-imposed reduced limits of £25k for spending without additional sign-off.

Suffolk and North East Essex

SNEE ICB is another whose September Board Papers do not give a clear financial update until page 250. To discover the plan, it is necessary to go back to the July meeting, where the System Finance Plan was revealed. It commits to a break-even position by the end of 2024/25 on the basis of £71.9m of efficiency savings but also contains “further unmitigated risks of £23.4m.”

By July the month three position report centred on concerns over the (RAAC-riddled) West Suffolk FT which was £3m off its financial plan, while “the difference between their planned spend and actual expenditure was increasing month on month.”

The plan allows for the Trust to deliver a £15m deficit, balanced by the ICB ending with a £14.8m surplus. But if the system is not able to resolve the deficit within its financial allocations, it will have to forgo £31m of incentive funding. (p138)

The overall savings target for the system equates to 3.1% of system allocation, which is below many other systems with larger deficit plans: but all organisations “have further work to undertake to have fully developed programmes to deliver the target.”

There is optimism because plans promise £54.5m of efficiency schemes (76% of the overall target) are recurrent.

However by month 5 the system was off plan by £5.1m, being driven primarily by the position at WSFT, which had deteriorated by a further £1.5m.

If the current run rate continues, the full-year variance would be £18m worse than planned. Whilst more actions will need to be put in place, draconian measures have been put in place in West Suffolk, including:

• Trust-wide non-pay panel for any expenditure over £500.
• Review the ‘non-pay catalogue’ to “mask and restrict choice wherever possible.”
• A critical review of all interims and non-critical contracts with a view that they should cease.
• The weekly vacancy approval panel has now met four times. It has been suspended, meaning no further posts will be approved.
• Revised process for double lock intervention.

The ICB has also reported concerns over continuing healthcare, which was forecast to overspend by £6.7m. (p250) But like other ICSs there seems to be no real alternative to paying up and trying to compensate through savings elsewhere.

PREVIOUS STUDY OF THE REGION  – NOVEMBER 2023

Bedfordshire, Luton and Milton Keynes ICB – BLMK

Despite the large apparent long-term gap between needs and resources, referred to above, BLMK ICB claims that the underlying deficit in 2023/24 is as little as £22m, and the efficiency savings required are as low as £18.5m, with just one third of this yet to be identified. (p227)

The July Board papers report that BLMK’s deficit has grown by just £6m, “predominantly due to prescribing pressure”. Many ICBs would be delighted to report such a comparatively healthy situation, but BLMK insists even this scale of deficit is “unsustainable,” and it leaves “no contingency in place to fund redundancies” of ICB staff “following the planned staff consultation” on how to reduce ICB running costs by 30%.” (p232)

NHS England has said there is no additional funding to cover the costs of “restructuring.” (p232)

It seems BLMK is especially concerned to make its financial position look neat and tidy since Milton Keynes University Hospital has “been included in the national New Hospitals Programme, and is awaiting a decision on funding approval from the national team.” (p97-98)

Let’s hope the Board don’t hold their breath waiting for that funding, or hang too many of their hopes and plans on the new hospital, which they are already fearing may not give enough additional capacity unless demand can some how be “mitigated” by diverting some care to community-based services.

Cambridgeshire & Peterborough (C&P)

The July Integrated Performance report reveals C&P ICB is troubled by inadequate capacity both for mental health services (resulting in a rising number of “inappropriate out of area placements”(p5) and a growing waiting list, especially for Dermatology, Ophthalmology, Orthopaedics and Urology. Apparently 86% of the near 147,000 waiting list is for outpatient activity, which is running below plan. (p10)

Cancer waiting times are also worse than target, with skin cancer services at Cambridge University (Addenbrookes) and at North West Anglia (Peterborough) hospitals. An outsourcing contract at Peterborough has come to an end, but the ICB are working with a new private sector day hospital in Peterborough (The Hamptons Hospital) “to develop a tele-dermatology service.” (p15)

Staffing pressures on the mental health trust have forced the temporary closure of a ward, and in addition to out of area placements there has also been an increase in longer lengths of stay, which is not explained but represents a significant cost pressure for the Trust and for the ICS.

C&P is clearly facing a far more demanding situation than BLMK, with its projection of break even in 2023/24 based on £120m of ‘efficiency savings’ – for which there were still no details available for the Board in July to consider. The plan also assumes inflation (including the hefty PFI payments for Peterborough Hospital) at no more than 5%, and acute trusts achieving the elective recovery target of 114% of the activity delivered in 2019/20. (p24)

C&P admits (p26) that “In agreeing a break even position the system is carrying significant risk of £125m,” but exactly how much of that risk has been covered by mitigation will only be revealed at a subsequent ICB meeting.

Hertfordshire & West Essex (HWE) ICB

The July HWE Board meeting was told that the ICS is forecasting an exact break-even for 2023/24, with a surplus of £9.4m to be generated by the ICB, to precisely balance a projected £9.4m deficit by the five NHS providers within its area. (p59-60).

However it’s not quite as simple as that. The system has to deliver “efficiencies” totalling £51.8m during the year, and although one paragraph claims these have been built in to budgets, the next paragraph admits that £8.4m has not yet been built into “individual budgets” – 3 months in to the financial year.

The chances of hitting the financial targets look slim. The ICB documents reveal for example  that the numbers and costs of Fast Track packages for Continuing Health Care patients have gone up sharply, with the average monthly cost now 30% above budgeted costs at £4,641 per patient, with two patients alone forecast to cost £780,000 over the year. Costs of jointly-funded patients are also up 24% to an average of £6,432 per month with a maximum of £9,500 per week. There has also been an increase in numbers of fully funded care packages costing over £200,000 each per year, increasing costs by almost £9m in 2023/24. (p189)

The HWE Board are frank enough to admit that some apparent “savings” have been delivered by happy coincidence (unplanned staff vacancies which have reduced running costs, “even though we do not have a fully developed plan to reduce our running costs”. (p192)

Mid and South Essex (MSE) ICB

The July Board papers underline the much more serious financial problems besetting this ICB, which is one of the minority which admitted to NHS England that they could not promise to balance the books and got agreement for a plan expected to deliver a £40m deficit (“a £6m improvement on the outturn position for 2022/23”!).

The Board is warned that their summer will not be an easy one:

“The plan position represents a significant challenge with increasing risks in all parts of our system. MSE Chief Finance Officers will be meeting with the regional team monthly with national escalation meetings scheduled for early August.” (p91)

Already by Month 2 the plan is running at double the planned deficit (£16m rather than the planned £8m), and leading to panic measures:

“Non recurrent measures have been utilised to support the in-year position and a full reconciliation of the underlying position will be reported for month 3. The year-to-date position largely reflects the current shortfall in efficiency programme delivery …” (p93)

Even to deliver a £40m deficit required the MSE System to deliver target efficiencies of £119m.

The Joint Forward Plan included in the ICB’s May Board papers included a frank list of the problems faced by local health chiefs.

“• We are not well resourced in terms of workforce – with particular shortfalls in primary care, and significant nurse, support worker, allied health professionals and in some clinical specialities, medicine vacancy rates. Both recruiting and retaining staff has been problematic in recent years.

• We are challenged operationally – struggling to maintain standards in some areas whilst escalation capacity usually reserved for winter is often required year-round. Length of stay in our services has increased significantly.
• We have a substantial historical structural deficit and we have failed to deliver our financial improvement plans. We have posted a system financial deficit for 2022/23, driven largely by a failure to deliver efficiencies and an over-reliance on bank and agency staffing – underpinned by rising demand in certain areas of care, more complex treatment regimes in some specialities and a failure to prevent chronic disease exacerbation.”

• Our patients have not received the highest quality care in some cases – we have quality and safety challenges across many services.
• We are failing to meet many of the statutory requirements set out in the NHS Constitution.” (p30)

The ICB has been one of those that have been penalised by NHS England for their poor financial performance and as a result: “A key consequence of our deficit is that we have been limited in the investment we have been able to make in transforming health and care.”

As a result of the chronic lack of investment “constrained capital is now creating pressures and limiting our ability to transform due to irretrievable equipment/infrastructure breakdown.”

The ICB fears that another year of failure could lead to intervention by NHS England: “We do not wish to cede control over our operations that is a likely consequence of not resolving our deficit. We wish to retain our autonomy within the agreed NHS framework.”

The bulk of the financial problems, and the greatest challenge in delivering the required savings is the troubled acute provider Mid and South Essex Foundation Trust, which initially projected a £50m deficit. (p295)

Norfolk and Waveney (N&W)

This ICB, chaired by former New Labour health secretary Patricia Hewitt, (whose review of the working of ICBs, commissioned by Jeremy Hunt, has been largely booted into the long grass, with ever tightening control from NHS England rather than the proposed increase in local level decision making), is facing serious and worsening financial problems.

Minutes of the May meeting show the ICB carried forward a deficit of almost £20 million, and had submitted a break-even budget dependent upon delivering 5.1% of “efficiency” savings and carrying “a large amount of risk”. (p10)

And already by Month 2 the deficit of £11.7m is 60% higher than the planned figure, with Queen Elizabeth Hospital Kings Lynn (perhaps one of the more notorious RAAC hospitals, with over 2,400 props holding the roof up) accounting for £1.5m “slippage” in identifying Cost Improvement Programme savings “due to continued pressure on capacity and the impact of RAAC”. (p123)

The efficiency target of £36.7m required to break even is 5% of the ICBs “influenceable expenditure” (p123), whereas historically the target [which they have not achieved] has been 3-3.5% of influenceable spend (p131).

Measures to achieve over 40% of the efficiency target had not yet been identified by July.

N&W’s plan also assumes it can somehow cope with much of another £75m of risk using non-recurrent measures, although this seems much less than convincing when the ICB admits – in the second half of July – that:

“£52.2m of this risk is formed from mitigations which have been entered into the plan, which unless carefully managed will not be achieved. These include achievement of as yet unidentified efficiencies and slippage on investments. The other £22.8m is formed from cost pressures which are not included in the plan, such as non-achievement of identified efficiencies and unplanned inflation.” (p129)

Only if all these challenges are met will the ICS be able to hold down the underlying deficit to £57m carried forward to 2024/25.

It’s clear that the ICB and system leaders are struggling to find ways to cover more than £16m of the efficiency target. It lists possible answers:

Plans to identify the £16.2m gap include

• A close the gap session with all EMT leads
• Finance to meet EMT leads individually for detailed budget review
• Review deferred income on the balance sheet
• Review all contracts £250k and above
• Review PMO opportunities that haven’t moved to the project stage
• Review all discretionary spend
• Review the procurement pipeline
• True-up exercise

However it ends with a warning that if these don’t deliver, they will wind up

• “Exploring less palatable ideas such as restriction policies”. (p130)

Another dire warning is added:

“Despite having a draft breakeven plan, the ICB’s exit underlying position for 23/24 is currently a £57.3m deficit. This is due to the significant non-recurrent measures which have been put in place to achieve the break even plan, which are shown on the list below.

“ This underlying deficit assumes that none of the identified risks materialise and that the ICB delivers its £36.7m efficiency target recurrently. If recurrent risks materialise or any of the efficiency target is not delivered, or is delivered non-recurrently, then the underlying deficit will increase by that amount.” (p131).

N&W is one of the ICBs that includes use of the private (“independent”) sector as a cost pressure. (p192)

Suffolk & North East Essex ICB (SNEE)

This ICB is another with major problems from RAAC in the West Suffolk Hospital, which has been included in the original list of “40 new hospitals” but is nowhere near ready to start building.

SNEE initially projected a £59m system deficit in February, but revised this to break-even, despite an underlying deficit of £52m. (p196)

But the prospects of achieving break-even seem to be evaporating fast, and by Month 2 the ICB had noted a £20m worsening in the underlying deficit, largely because of an increased level of non-recurrent measures used to deliver the proposed savings. (p245)

The local system’s worsening financial problems centre on the West Suffolk Hospital, “which appear to be worsening and these will impact on this financial year and future years. This will require immediate action alongside the development of a multi year programme to address the financial sustainability of the organisation.” (p247)

The ICB is seeking to compensate for lack of capacity at West Suffolk by opening a multi-specialty Elective Surgical Unit at Newmarket Hospital, consisting of a 32-bed inpatient ward and two laminar flow theatres, although this will require additional capital. (p476-7)

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