With just days to go until the management structure of the NHS is thrown into a new round of confusion and obfuscation, with the establishment of just 42 new “Integrated Care Boards” to cover England, there is vanishingly little useful information in the public domain to indicate what is likely to happen.
But what Lowdown researchers have managed to quarry out of the available documents from soon to be defunct Clinical Commissioning Groups and from Trust Boards is enough to confirm that with few if any exceptions the whole system will be thrown immediately into a major financial crisis.
This is definitely the case in London, which has already been carved into five with the mergers of CCGs to pave the way for ICBs.
The most complete figures could only be found in a table tucked away at the back end of board papers for Oxleas Foundation Trust in SE London (p136).
This table shows initial plans submitted from all five ICB areas in March projected a combined deficit for 2022/23 totalling £768m (SE London £102m, NE London £100m, North Central London £283m, NW London £94m and SW London £189m).
These projections had already been squeezed downwards: according to Camden and Islington FT Board papers the original NC London deficit was a massive £359m (p55), while according to West London Trust’s April Board papers “the current NW London financial gap of £94m [was a] significant improvement from the previously reported figures, which at one point was £300m.” (p89)
It also reveals that under pressure from NHS England’s London Regional bureaucrats the total London-wide deficit was squeezed down by another £145m to £623m by April 28 – despite the South East London projected deficit actually increasing at that time by £30m.
The reductions appear largely (if not entirely) to have been achieved by assuming increasingly large and improbable “cost efficiency” savings – and even more improbable savings have since been added in: for example the SW London system plan submitted to regulators on June 20 projects a “full year breakeven position” – on the assumption that its providers can deliver savings equivalent to an astonishing 7% of system cost base. (p208)
More extraordinary still the SW London system has assumed all of these savings can be made at the end of the year, even after notching up a £34.8m deficit in April and May (p216).
SW London CCG admits that that most significant risk is the “under-delivery of efficiency plans” – but also reveals that 52% of the efficiency savings, (adding up to £142m) are categorised either as “opportunities” or simply unidentified. In other words not even theoretical proposals.
Just 31% is covered by “Fully developed plans,” and 18% by plans actually in progress.
The biggest challenges are in the acute trusts, Epsom & St Helier, Kingston and St George’s, where the April Finance Committee reported concerns “on a number of fronts”:
“the lateness at which the planning was taking place, albeit in line with national guidance; the size of the remaining deficit and the level of cost improvement initiatives that would be required even with the proposed deficit.
“The Committee further noted that some of the assumptions on which the Trust was being asked to base its plan, such as around the treatment of inflation, would appear to have been overtaken by events.” (p99)
The SW London plan also seems to be incredibly naïve in the way it wishes away real problems and assumes that “full and frank discussions” and setting up a new “People Board” will magically open doors.
Assessing the risk of “Potential impact of workforce morale on ability to make productivity changes at pace,” SW London bosses respond in the first public board paper for the first ICB meeting in July that they will sort this, through “Clear, transparent and inclusive communication with staff. As part of the SWLICB development a new People Board will be established, one of the workstreams will be belonging and inclusion.” (p219)
So that’s alright, then, staff are bound to be impressed with a new form of words.
The “SWL People Board” is also expected somehow to overcome the runaway inflationary crisis and “gain improved recruitment and retention.” And in case anyone fears there may be inadequate communications to staff and stakeholders, leading to loss of support, we are assured: “SWL will work closely to manage a consistent and structured message to staff and stakeholders.”
What could possibly go wrong? Even “unpalatable choices” that may have to be made will be made much more appealing by “full and frank discussions”.
Of course it will be a shambles. New ICBs set up without public engagement or support and constrained by brutal cash limits and Rishi Sunak’s tight-fisted spending review will find it extremely hard to impose impossible savings targets on trusts whose management would face the public blame for failing services.
And of course SW London is far from the only big problem.
South East London, under pressure to reduce its projected deficit, wound up increasing it by £30m, although we have not yet been told what final projection was eventually sent in to the regulators earlier this month. The process of finalising the financial plan was, like almost everything else about ICBs, done behind closed doors.
And while Guy’s and St Thomas’s trust remains tight lipped on its financial prospects for 2022/23, we know that King’s Healthcare Trust was running an underlying deficit of £23.4m a month (£281m per year) in the second half of last year, feared it was facing an extra 2% efficiency target this year, and began in April with a deficit of £6.8m, noting that its plan is “dependent of £55m cost and income improvement plans” (p18 and p38).
We also know Lewisham & Greenwich trust is concerned that “There is also continued pressure from NHSE/I for South-East London Integrated Care System (SEL ICS) to improve its current planned deficit. There are ongoing discussions across the system how this will be achieved but this could result in further improvements required to our deficit putting further pressure on internal resources and the efficiency programme.” (p74).
Oxleas board is concerned that attempts to manage down the SE London deficit “currently carries a high level of risk re red rated CIP schemes, non recurrent measures and uncertainly re Elective Recovery Fund payments for 20222/23” (p121).
North of the river, there are also grounds for concern, especially North Central London, whose shambolic, scrappy and error-strewn 107-page Powerpoint document that claims to be a “System development plan” admits up front that “The underlying financial position of the NCL ICS remains unsustainable.” (p69)
It also admits that this problem pre-dates the Covid pandemic:
“Pre-Covid, the NCL system had a significant gap between available funding and underlying costs, with deficits (some sizeable) in most NHS organisations, additional pressures in local authorities and challenges in primary care. This gap and these challenges will return when we exit the Covid financial regime.”
However admitting the problem does not necessarily lead to any more realistic approach to planning: the “next steps” appear to be simply more generalisations and meaningless aspirations:
“Engagement with Trust Boards, CCG GB, Heads of Finance, dedicated workshops to continue to embed financial strategy. …
“Work with wider system partners to develop a whole-system view to finances …
“Singularly define what we mean by ‘need’ reflecting the work on deprivation, equity of access and inequality led by the Population Health team for NCL leadership agreement.” (p72)
While the waffle goes on, trusts like the Royal Free admit they are in trouble:
“The Royal Free group plan is for a significant deficit, the largest deficit in North Central London (NCL), with NCL having one of the highest deficits nationally. A £40m financial improvement programme (FIP) is being targeted but this will be extremely challenging to deliver.” (p29)
Indeed the Royal Free’s “Board Assurance Framework (BAF) has decided to refer explicitly to “Tighter financial constraints”, since it was agreed that “reference to the ‘underlying deficit’ was no longer relevant in light of the new funding framework” (p71).
University College London Hospitals also updated its financial plan to NHSE/I on 28th April “with a £15.5m control total deficit for 2022/23.” This position includes an increase in the Trust’s efficiency target which “has been flagged as unidentified in the Trust plan, but the expectation is that this additional efficiency will be delivered through non-recurrent adjustments” (p143).
UCLH is also the only board to mention an obvious problem for NC London:
“NCL ICS is going to have one of the biggest funding reductions nationally as a result of efficiency requirements and because the ICS is over-funded based upon the new national methodology for how much NHS funding ICS’s should receive based on their population.” (p174)
In NE London, too there are some big underlying problems, with the finance report in the Barts Health May Board papers noting:
“The Trust is reporting a pre system top-up deficit of £173.1m… The system top-up … effectively replaces what was known as the Financial Recovery Fund (FRF) allocation pre-pandemic. System top-up funding is primarily based on NHS England’s calculation of the Trust’s pre-pandemic (2019/20) underlying deficit.” (p78)
Further east in NE London the Barking Havering and Redbridge Trust (BHRUHT) is also many miles from any hopes of a break-even:
““The trust … was £10m adrift of the £66m planned underlying deficit.
“The underlying run rate is c£6m deficit per month with a full year underlying deficit of £76m, although it is difficult to confidently determine due to CoVID. … “The £10m distance from plan is a result of under-delivery against priority waste reduction programmes.” (p116)
“… Next year the trust must reduce costs by £39m and, as part of the Elective Recovery, access an additional £10m of revenue through theatre efficiencies in order to achieve an underlying deficit of £65m. … Currently the trust risk adjusted plans amount to £23m so further work is required in order to close the gap and start the year on plan.” (p120)
Meanwhile in NW London commissioners and trust bosses are living in denial, blaming London Ambulance Service (£69m) and Hillingdon Hospital (£25m) for an initial forecast of £94m deficit. Then the Hillingdon trust board was badgered into reducing its projected deficit to just £9m, assuming a cost reduction target of £13.7m which “has not been fully identified and as a result Divisions will receive a negative budget to address the gap.” (p40).
However two other NW London trusts, Imperial and London North West both have problems to address.
Imperial faces a need for £37m efficiency savings (3%) but had only identified schemes worth £11.9m, and the Finance Committee was concerned that hyper-inflation costs of £10m had not been properly included. (p116-117)
London North West admits its main hopes of pay cost reductions hinge on reducing bed utilisation, as well as focusing on waiting list initiative/temporary staffing cost reductions. It also aims to make savings by ceasing use of independent sector support, on which c£16m was spent in 2021/22.
But with little sign of realism from any of London’s ICB areas, and finance directors apparently ready to sign off on extraordinary plans they know will be virtually impossible to achieve, it seems the rocky road starts the day the new system kicks in.
Local campaigners will need to keep eyes and ears open at all levels if they are to keep abreast of the changes and the policies as they emerge. The Lowdown welcomes any local updates from any of the 42 ICS areas and will endeavour to keep health unions, local politicians and campaigners informed of the sharpest issues as they take shape.
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