A Lowdown trawl through ICB Board papers published in November has revealed it to be an almost surreal moment in which NHS England’s agreed deficit funding has been received, creating perhaps the most favourable moment of the entire financial year, with relatively small scale deficits still showing through.
But as Coventry & Warwickshire ICB notes, theirs is “one of the smaller estimates of ICS financial forecast risk regionally and nationally (with the [Midlands] regional Month 6 Year To Date deficit running in excess of £250m” even after deficit support.” The ICB warns that: “It is unlikely that any further slippage would receive cash support nationally.”
Some of the slippage is far from small even now: Birmingham & Solihull ICB have been told of a £69.9m deficit, “an adverse variance of £51.3m compared to plan” at month 6, and they have been relegated: “BSOL ICS have now been rated as a 3+ system for financial performance by NHSE – this requires to submit a detailed plan ahead of Month 7 submissions setting out the actions being taken to address our current financial position and return to plan.” (p106)
The harsh reality beneath the surface in many ICB reports is the daunting scale of the cash savings to be delivered if local systems are to get anywhere near break-even. As we have noted, the targets for savings to be achieved by the end of March add up to a massive £8 billion.
It is clear that many of the schemes have been heavily loaded to kick in during the final few months of the year: but that is risky given that this coincides with the winter, and all of the extra pressures that puts on the NHS.
Lancashire and South Cumbria, seeking to cut £530.8m (8.4%) this year, has left 76% of savings to the last half of the year, with £160m still classified as high risk or unidentified.
Moreover scraping through this year on the basis of large scale one-off “non-recurrent” measures simply passes the problem on to next year: and HSJ Editor Alastair McLellan is correctly warning that now austerity has been brought back by Rachel Reeves’ budget, 2025/26 is likely to see the £10 billion increase largely or entirely gobbled up by pay increases – meaning even more hard times to come.
And so November Board meetings have seen various ways in which the ICBs are trying to get by.
Cambridgeshire and Peterborough, for example notes: “The ICB forecast is a breakeven position which will be achieved through increased robust grip and control measures on the areas of identified pressure alongside assured delivery of the efficiency plan with additional efficiencies being identified.” (p44)
North Central London is one of several ICBs still concerned at the cost pressure from use of private providers after spending increased by £4m above plan, while Derby and Derbyshire ICB is concerned that trusts are using too much “insourcing and outsourcing capacity” to deliver performance targets, and that “as a consequence we are losing significant ‘margin’ on Elective Recover Fund income.” (p190)
North East London is one of several ICBs that seem to be bracing for financial failure, noting “As it stands and without further system-wide intervention, the ICS deficit at year-end will be £87.6m, i.e. the unidentified mitigation position,” (p176) or using different figures “The month 7 year-to-date position calculates a straight-line extrapolated ICS deficit of £157m, reducing to £73.7m after adjustments for non-recurrent items and plan phasing.”(p179)
Bath North Somerset, Swindon and Wiltshire admit “We are re-forecasting and it is unlikely we will hit our planned number, we are aiming to be below a £40m deficit (once we add back deficit funding) and there are a series of actions via Recovery Board.”
Both Coventry and Warwickshire and Black Country ICB are counting the cost or fearing the consequences of delivering “savings” based too heavily on one-off measures. Coventry & Warwickshire are trying to save £124m, but to date only a third of the savings are recurrent (p178) stacking up big problems for next year.
Black Country saved a massive £207m (6.9%) last year, but only 44% of this was recurrent, leaving the system staring down the barrel of an even bigger £248m savings target this year, with only 51% recurrent. (p153)
The problems are increased by the fact that (in common with many ICBs) they had hoped to be able to hold on to money underspent on dental services and put that towards their deficits:
“The financial plan is challenging, and relies upon assumptions in respect of dental underspends, use of allocations, impact of enhanced financial controls, increased efficiencies, and receipt of Elective Recovery Fund.” (p320)
However Staffordshire and Stoke on Trent have now been told by NHS England that these funds will be clawed back, and this is certain to affect all of the unspent dental budgets. (p159)
This is just a part of the financial plight facing the ICS: their Medium Term Plan spells out a huge and growing problem:
“As a system we have a circa 10% underlying deficit which has to be addressed to return the system to a financially sustainable place.
“The unmitigated model identifies that without action that we are likely to see a 2.9% increase in Type 1 Accident and Emergency activity, 2.7% increase in daycase and elective and 2.7% increase in outpatients. Demand for community services is expected to increase by 6%, Mental Health services will see a 2.7% increase and Primary Care demand increase by at least 7%.”
As a result the ICB estimates “We will need 473 WTE additional workforce and our underlying financial deficit will rise to over £600m within 5 years.” (p153)
Several ICBs seem to have effectively given up on achieving their planned savings: Derby and Derbyshire ICB has said “The System remains committed to delivering this plan but the risks are escalating.” (p190), Northamptonshire ICB has said:
“The System continues to formally forecast the delivery of the agreed 2024/25 £55m deficit financial plan. It has however advised NHSE that significant cost pressures are being reported by [Kettering General and Northampton General hospitals[, resulting in a significant delivery risk to the overall System Financial Plan.” (p54)
North East and North Cumbria ICB’s Finance Performance and Investment Committee warns of £161m of “Net unmitigated risk” across the system, and that “There is an overarching risk of failure to deliver the 2024/25 operational planning objectives as outlined in the corporate risk register.”
South Yorkshire effectively admits that the search for savings has gone well beyond “efficiencies” when it lists the areas in which it is having to make “difficult choices”: “Commissioning Restrictions; Medicines Restrictions; Primary Care choices; Mental Health and LD Choices; Acute Choices; Comprehensive Review of ICB Spend.”
Cheshire and Merseyside ICB, one of three North West ICBs all facing enormous targets for efficiency savings is one of several ICBs seeking to cut spending by axing jobs: it notes that whilst “[Whole Time Equivalent] WTE have reduced by 820 (1.0%) compared to Month 12 (23/24), there is a 349 adverse position against the YTD plan which predominately lies in the community and mental health sector. Based on recently revised workforce trajectories providers are planning a further 1,292 WTEs reduction by March 2025.”
So it’s in some disarray that the raggle taggle band of commissioners and trust bosses in England’s 42 ICSs head into what promises to be a rough winter, made even rougher by the new government’s refusal to face up to the scale of the damage done to the NHS by 14 years of underfunding, and timidly deciding to carry on underfunding for the indefinite future.
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