According to a Lowdown survey of recent board papers, Integrated Care Boards (ICBs) covering the South West of England are cutting spending on workforce and continuing healthcare.
Many of the board papers include optimistic targets for implementing elective care, which can boost the ICS’s income.
Three ICS have large deficits and will receive further penalties for finishing the year in the red.
The overarching impression from all the board papers is that the ICSs are struggling to rein in costs and improve services.
In services where performance is improving, it is by small amounts, and national targets have still not been met in many cases.
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The seven regional ICBs are battling to deal with deficits and meet the financial targets agreed with NHS England.
With all the ICS attempting to carry out more elective work to bring in money and reduce waiting lists.
ICBs across the Southwest are struggling with the consequences of years of underfunding and lack of investment. They have large waiting lists for elective care, inadequate capacity, a lack of permanent staff, and crumbling infrastructure, and they work with a social care system that is also underfunded and understaffed.
Mounting deficits
Three ICS in the South West are struggling with large deficits, with NHS Devon the worst with a deficit of £384 million at the end of 2023/34.
The plan approved by NHS England is to cut the deficit to only £80 million by the end of 2024/25, which has forced a search for substantial savings.
NHS England has approved deficits at NHS Bath and North East Somerset, Swindon and Wiltshire (BSW), with a £30 million deficit, and NHS Dorset, with a £20 million deficit. However, these ICBs will suffer financial penalties under NHS finance rules introduced in May 2024. They are meant to start repaying their deficits from the last two years, and consequently, their funding allocations have been reduced.
The remaining ICSs in the region—NHS Bristol, North Somerset, and South Gloucestershire (BNSG), NHS Cornwall and the Isles of Scilly, NHS Gloucestershire, and NHS Somerset— submitted plans that are breakeven. However, all the ICSs across the region are struggling to make savings and adhere to the plans approved by NHSE.
Finding savings is difficult, but recurring savings are also becoming even harder.
Papers from Gloucestershire ICB from a meeting in July note that only 51% of the savings it has found are recurrent, so more savings will have to be found down the line.
Non-recurrent savings in the NHS are one-off steps that improve a trust’s financial position in a given year but don’t fundamentally change the cost of running the organization. They can’t necessarily be repeated in subsequent years.
Some examples of non-recurrent savings include:
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- Land sales
- Holding vacancies open
- Delaying maintenance work
Cornwall and the Isles of Scilly were among the few ICSs that reported breakeven for three consecutive years, but this was achieved through non-recurrent savings. It is clear from board papers that it is now struggling to make further savings.
Devon ICB is in a particularly difficult financial position. The ICB originally submitted a plan for the ICS that had a £85.4 million deficit and required a massive £207.9 million in efficiency savings to meet this plan.
NHS England made the ICB resubmit the plan with a deficit of just £80 million, so an extra £5.4 million in savings has to be found. The ICB papers note that the original plan was high risk, so the new plan has an even higher risk of this deficit not being met.
Bath and North East Somerset, Swindon, and Wiltshire ICS have to find £141.9m in savings to deliver the £30m deficit agreed in the 2024/25 plan by month 4 (July). Board papers note that the ICS “will need to deliver c.£34m of interventions across the rest of the year to ensure that the current run rate levels do deliver the agreed full-year plan.”
Across the Southwest region, the ICBs’ two major savings targets are workforce and continuing healthcare, plus attempts to increase elective work to increase income.
Workforce
All ICSs across the region are trying to reduce the cost of their workforce by reducing the use of agency, bank, and non-clinical permanent staff.
However, to avoid unsafe staffing, the ICSs also need to attract more permanent staff and reduce the current vacancies. Somerset, Cornwall, the Isles of Scilly, and BSSW all have clear targets in their board papers for reducing agency, bank, and substantive staff. Devon and Dorset have System Vacancy Control Panels in place to assess vacancies and whether they are needed.
Not all is going to plan, however. Reports from Cornwall and the Scilly Isles ICB in July show that the Trusts’ substantive workforce was 241 below the 2024/25 operational plan, and they were continuing to employ too many agency (74 above plan) and bank staff (62 above plan) leading to a much higher total workforce cost. This has been a particular problem at the Royal Cornwall Hospital Trust, and in September 2024, RCHT put in place a “vacancy freeze on all recruitment for 3 months” as part of a financial recovery plan.
Continuing Healthcare (CHC)
The ADASS Spring survey report released in mid-2024 highlighted the interdependency between the NHS and social care and the impact of recent NHS initiatives on council finances.
The survey found that Councils have to fund an increasing number of people whose care and support had been covered by the NHS (Continuing Healthcare – CHC) or jointly funded but have now been denied CHC.
Board papers across the region clearly showed that CHC is a major target for savings. Numbers are increasing, as is the complexity of the clients’ needs, leading to more expensive care packages. How savings are being made in this area is not always clear, but there is evidence that negotiations with local authorities over how much the NHS pays for care packages are ongoing in several ICB areas.
Bristol, North Somerset, and South Gloucestershire (BNSSG) ICB expects to make savings on adult fully funded CHC later in the year following the implementation of schemes to deliver savings. Recent board papers report that four of eight schemes to deliver savings have been implemented this financial year but give no details of the schemes. The ICB does note, however, that there is “continuing engagement” with LAs about costs.
BNSSW ICB notes that it is negotiating with the local authorities over how much the NHS will contribute to high-cost placement and complex support packages for children and young people. The board notes that “There remains concern that a single joint funding model has not been agreed with a clear percentage split between health and local authorities.”
The ICB notes that it is working with three local authorities to review and understand how the money is spent, ensuring this is right and fair for each partner.
In Cornwall and the Scilly Isles ICS, CHC is a target for spending reduction, and the ICB notes that it plans to “pick this up” with the local authorities.
In Devon ICS, a target is reducing the number of clients receiving care. Board papers note a “continued grip and control of front end assessment threshold and reviews which will reduce client numbers” and that those receiving the most expensive packages will be“regularly reviewed to determine if care is still appropriate.”
In Dorset ICS, Personal Health Commissioning (PHC), which includes CHC spend, is reported to be “particularly pressured” and £44.6m in savings is required. Of this, only £8.8m in savings has been identified to date through ‘tighter controls’.
Elective careMany of the board papers include optimistic targets for implementing elective care, which can boost the ICS’s income.
The NHSE has given each ICS an Elective Recovery Fund (ERF) target for the amount of elective work it has to carry out based on how much it carried out in the 2019/20 financial year, the final full year before the COVID shutdown. With 2019/20 set at 100%, all the ICS have a target over this, such as 103% or 108%. This was put in place to reduce the expanding waiting list.
Some ICB plans rely on performing much more elective work than their ERF targets to balance finances and reduce deficits. BSSW, for example, has an ambitious elective plan target of 118% activity, which is 9% over its ERF target. However, the September board meeting noted that elective performance remains one of the key risks for the full-year delivery of the financial plan (the other being the delivery of efficiencies).
Over ambitious targets?
In Gloucestershire ICS, the plan is to hit an ERF target of 118% (its actual target was 107%). The ICB is hoping that new coding will give them extra money. They note that “there are a number of uncoded episodes of care which, once coded, may generate an additional c£1.1m to ERF achievement.”
Other ICS are struggling to meet ERF targets; Dorset providers are behind on meeting ERF targets and continue to be heavily dependent on insourcing to carry out elective work to try to meet the ERF target.
In BNSSG ICS, the ICB’s financial plans assumed a level of elective performance over and above the NHSE ERF target of 103%, but board papers note that the system has failed to deliver this to date, which is driving part of the financial deficit.
Use of the independent sector to clear those who have been on the waiting list for elective work the longest is noted in BSSW – “Specific focus on use of local Independent Sector to support local acutes” – and in Cornwall and the Isles of Scilly where for some time long waiters have been treated by the independent sector.
The ICS are also targeting areas such as medicines optimization, remodelling services, contracting efficiencies, reducing the numbers of patients still in the hospital but fit enough to leave, known as No Criteria to Reside (NCTR) patients, and IT.
The success so far
BHSSG ICS reported an overall year-to-date deficit against its plan of £13.0 million at the end of July (month 4), when the deficit at this point should have been £6.1 million according to the plan.
The Bath and North East Somerset, Swindon, and Wiltshire ICS had an actual deficit of £21.1m at month 4 (July), £7.1m worse than the position it should be in according to the plan. According to the papers “The system position has been impacted by ongoing operational pressures and slippage against efficiency plans.”
Dorset board papers in September report a “year-to-date negative variance of £6.0m against plans as at June 2024 (month 3), with a risk-adjusted forecast internally reported as £93.2m against the planned deficit of £21.3m.” Adding that “urgent action” is required “to deliver the remaining efficiency and bring the run rate in line with the plan.” In other words, they need to find a lot of savings over the coming months going into and through autumn/winter if the ICS is going to achieve a deficit of £21.3m by March 2025, which is what it has promised NHSE.
Success is measured not only by the amount of money the ICS has saved but also by targets for healthcare in its area.
In Somerset, the board papers from September report that the system is on plan for the system’s underlying financial position, the system’s financial performance, and its agency workforce spending, But it is NOT on plan for many clinical targets – 65 and 78-week elective waits, A&E 4 hour performance, reducing the number of people in hospital with No Criteria to Reside, dementia diagnosis, ambulance category 2 response times, NHS 111 performance, community waiting list, GP access, dental access and more.
According to the most recent board papers for Devon ICB (September), One Devon ICS in month 4 reported £33.4m efficiency achievement in the first quarter of the year, £0.2m above plan.
However, the urgent care system shows minimal improvement in most targets, including 4-hour A&E wait and category 2 response times. The Devon system remains behind the NHS national plan for the clearance of those who have waited a long time for elective care, and the cancer 31-day first treatment and 62 urgent treatment metric is currently failing to achieve the standard. Diagnostic performance achieved just 68% against a recovery target of 85%. There are currently 36,288 children and adults waiting for community services across Devon, up 2,442 more than May 2024 (33,846).
The overarching impression from all the board papers is that the ICS are struggling to rein in costs and improve services. In services where performance is improving, it is by small amounts, and national targets have still not been met in many cases.
Boards talk of plans and more efficiencies, but the reality is that Autumn and Winter are approaching, the time of increased costs for the NHS and the struggles will only get harder.
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