North Central London ICB (NCL)
July Board papers reveal (in minutes from the May meeting) the extent to which NCL bowed to NHS England pressure to reduce the apparent scale of the deficit they face for 2023/24 without securing any additional income.
“This had been an extremely challenging planning round, with a hugely demanding financial position evident across NCL and London in general
- The NCL position was affected by the withdrawal of a significant amount of nonrecurrent funding it received for the previous financial year, as well as the move to a more population-based funding model which adversely affects NCL due to the number of Trusts which provide services to a population from outside the area. This was further compounded by the fact that NCL was being asked to deliver the highest elective target in the country.” (p14)
An initial financial plan with a deficit of £95m was rejected in March, with additional risks of £70m.
The revised plan in May projected a deficit of £47.8m, but the July Board meeting heard that a further revised plan projecting break-even was submitted and accepted on May 17th. (p186)
As part of this the ICB committed itself to deliver a surplus of £10.6m, subject to the achievement of a number of challenging targets including full achievement of the ICB’s efficiency target, £25.6m.
The Board was told that the month 2 position “if extrapolated (straight-line) would give a £235.9m deficit for 23/24. For reference, the M2 position in 22/23, when extrapolated on the same basis, resulted in a £279.5m deficit for 22/23.” (p191)
The whole plan now depends on an “ambitious cost reduction programme of 5.6%”, for which of course no detailed proposals have been published, while “not all risks currently have mitigations.” (p206)
North East London ICB
The Board’s May minutes report:
“The operating plan has a balanced overall system position, however includes some organisations in significant deficit, largely in the acute provider sector, offset by surpluses elsewhere. Whilst the operating plan is balanced overall it contains an unprecedented level of financial risk and represents a significant challenge to deliver.” (p14)
This rather understates a plan that assumes a total of £487m in efficiency savings (£278m, with a risk of delivery slippage) and unmitigated risk (£209m). (p14)
As of month 3, just £103m out of the total system risk had been mitigated (p167) and the ICS was working on a financial recovery plan including:
- Identify unpalatable measures to achieve the financial plan (p168)
The first finance report of 2023/24, based on data from month two, showed the system already adrift, by £25.7m across the ICS, including £7m within the ICB.
“This was largely driven by pressures relating to inflation, run rate pressures such as ICB prescribing and Continuing Health Care (CHC) expenditure and the under delivery of efficiency schemes.” (p292)
Another warning sign was the level of overspending on agency staff, breaching the NHs England “cap”:
“The 23/24 cap is set at just under £141m. Reported year-to-date spend across providers is reported as £47m (or 33% of the total cap). The year-end submitted forecast on agency spend is £147m (£6m above the cap). However, the month 3 run rate on agency spend suggests that year-end spend could be in the region of £188m.” (p166)
North West London
There is an air of mystery over the NW London ICB finances, which were estimated a year ago to be running an underlying deficit estimated at £283m in September 2022 and rag rated red. (p134)
However, against the general run of play elsewhere it appears that the ICB has experienced a movement of non-recurrent funding to recurrent allocations and growth (£217m) enabling NWL to propose a balanced plan for the financial year, “reducing the underlying deficit from £52.8m to £36.3m.
It was also reported that NWL was “working to cut the underlying deficit over three years. (p11-12)
No summary of the total efficiency savings to be delivered appears to have been published, leaving a skeletal Financial Report that notes a significant £20m variation at Month 2, with a deficit of £29m instead of the planned £9m, which is apparently “driven by industrial action, ERF [Elective Recovery Fund], inflationary pressures, and profiling of efficiency schemes.” (p9)
Another report shows the acute trusts running at a deficit, while the ICB had three key areas that continued to overspend: Continuing Healthcare; Discharge to Assess; and Primary Care, mainly Prescribing and the costs of non GP /additional roles. (p74)
Interestingly NWL is the only ICB identified so far as planning a very significant reduction in provision of virtual wards:
“from 1,100 to 300-400 beds, based on the expected requirement for these beds and current occupancy.” (cutting by 64%-74%) (p24)
Acute providers, faced with overspending, have implemented heavy handed controls:
- Recruitment freeze
- Stopped all discretionary spend
- Apply additional grip and control
- Peer review across the different acute trusts
- Executive led meetings with service leads to identify recovery plan
South East London ICB
The July Board papers give no hard information at all on the financial situation, and no Performance Report. Annual accounts which should have been published at the end of August had not appeared by September 1.
Since the Board only meets quarterly this leaves us searching the April Board papers for scraps of almost inevitably out of date information.
A month 9 2022/23 finance report to the February meeting notes a deficit of £60m “driven by the cost of delivering elective recovery.” (p11)
The April Finance report notes:
“The Committee also considered the wider ICS financial position which showed a month deficit of £53.9m, noting this was an improvement from the month 9 reported position of a £60.3m deficit. The Committee discussed the key drivers which were higher than planned levels of covid activity and spend, increased utilisation of private sector overspill capacity for mental health, the impact of urgent and emergency care pathway pressures, pressures associated with elective recovery, inflationary pressures and efficiency delivery being behind plan. Despite this the ICS was forecasting a breakeven position for year end, with the release of non-recurrent funding across ICB partners to support the position. Whilst this supports a positive year end position it results in a recurrent carry forward pressure to address in 2023/24.” (p68/9)
The SEL Planning and Finance Committee in April received an update on the ICB’s operational plan submitted at the end of March. It complacently noted that the problems could be dumped on to the acute hospitals:
“A significant improvement of over £100m in our forecast financial position but with a remaining gap to break even of just under £100m, after applying ambitious productivity and efficiency improvement assumptions of 4.5%, noting the gap resides in the ICB’s acute sector. (p72-3)
NHS England were clearly not so easily persuaded that the SE London ICB had no real responsibility for acute trust deficits and a gap of £100. The Committee noted:
“As a result of our financial position and the financial positions reported by other ICBs nationally at end March 2023 the planning process remains on going with further submissions focussed particularly on finance expected through to early May 2023.” (p121)
We may have to wait some time to find out what happened four months ago.
South West London ICB
SWL is another ICB that has stuck with a deficit plan. Its July meeting was told:
“The financial position submitted on 4 May shows a system deficit of £81.6m, this had been agreed at our meeting with NHSE in April 2023.” (p119)
This can only be delivered if £210 million of efficiency savings can be achieved. (p141)
As a result of the deficit the ICB and the system providers are covered by a tight regime:
“NHSE has mandated that enhanced financial controls are in place. This builds on the controls that were implemented for all systems during 2022/23 (such as the sign off by NHSE of consultancy spend over £50k and monitoring of agency usage). … All NHS organisations in SLW ICS are subject to the additional controls including the ICB.
Examples of these actions include:
- Non-pay expenditure control process: All non-pay spend (with exceptions for drugs, in house delivery of clinical goods and services, depreciation and clinical negligence) must be approved by SWL ICS CFO and then NHSE finance.
- Agency non-patient facing control process: for all non-patient facing agency will need to be approved by executive locally before being approved by SWL ICS CFO and then NHSE finance.
- Vacancy Control Process: All current vacancies to go through an internal QIA process and remove from the establishment where there has previously been growth and it is safe to do so.
- Workforce Cost Planning Reduction: All organisations have set out their WTE (Whole Time Equivalent posts] reduction plans for 2023/24 and presented to the Financial Recovery Board in May. (p121)
Across the ICS total WTEs are currently 2% (838) above plan. Clinical Support is the largest variance by staffing group, particularly in St George’s, SWL St George’s and Royal Marsden hospitals. (p142)
So far £11m of the £212m efficiency plan has yet to be identified, and £50m is only a list of “opportunities”. (p141)
To make matters worse the ICS is spending more than planned on agency costs – and will breach the nationally set agency costs cap for the year if spending at current levels continues. (p131)
As things stand the system is set for a deficit driven by acute trusts with likely end of year deficits in Epsom & St Helier (£38m) Kingston (£17m) Croydon (£16m) and St George’s (£16m). But SWL is happy to blame the failure to deliver their plan on “the impact of industrial action.” (p131)
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