Midlands – ICB roundup

October 2023

Birmingham & Solihull

The September Board papers show a month 4 position of £30.1m deficit, compared with a planned deficit of just £3.9m. The situation has significantly deteriorated since Month 3, when the deficit stood at £18.4m, compared with a target of £3.6m.

The Finance Report admits that plans for 73% of its target efficiency savings had been made, but of these only 53% (i.e. 38% of the total savings target) were to be delivered recurrently – stacking up major problems for next year. (p52)

The Board was told that as well as provider pay exceeding planned levels, and agency spending above NHS England’s cap (Agency usage has increased by over 68% (p65)), other key drivers of the deficit (“as in previous months”) include:

• Impact of efficiency delays – £11m variance YTD
• Industrial Action – direct cost £8.3m
• Temporary staffing pressures – these remain significant, with a total pay overspend of £41m for the year to date, of which £1.6m relates to under-achieved pay efficiencies and £8.3m direct cost of IA [Industrial Action]. Seeing increased fill rates and bank usage.
• MH [Mental Health] Pressures – continued impact for level/casemix of Out of Area beds. (p57)

Black Country ICB

September Board papers did not contain the expensive looking Auditors Annual Report from Grant Thornton, published in August, which was published separately on the ICB website, and discussed in surprisingly casual fashion by the Audit Committee (p144-5).

It notes that despite having achieved a break-even position last year:

“the system is planning a £68.8m deficit for 2023/24 “which is dependent on delivery of a challenging £211.4m efficiency plan.  … [of which] £144.1m (68.2%) was yet to be identified as at May 2023. The system underlying deficit for 2023/24 is £255.6 million.

Grant Thornton note that the target cost improvement plans for 2023/24 are equivalent to 8% of the whole system’s allocation – an extremely high target to aim at, but £82m of this (39%) is planned as “non-recurrent” measures, leaving a grim level of underlying deficit for 2024/25. (p13)

Worse still more than two thirds of the planned schemes (£142m) are rated red as high risk.

The report goes on to state that on the basis of the large and continuing underlying deficit “NHS England’s view is that the system is not financially viable.” (p14)

And it concludes with its Auditor’s Judgement: “Based on the work undertaken, we are not satisfied that the Integrated Care Board has proper arrangements in place to secure economy, efficiency and effectiveness in its use of resources. We have therefore identified a significant weakness in arrangements.” (p22)

Grant Thornton’s Auditors Annual Report states:

“Reducing expenditure and increasing productivity is now the priority for all NHS bodies. Cost savings or productivity improvements will necessitate wholesale redesign of services to deliver savings at a scale not seen for some years.” (p15)

It reveals that “Details of the ICB’s Operational Plan submissions for 2023/24 were presented to the Private … Board meeting in March and May 2023,” (p16).

The BCICB’s Operational Plan has still not been published more widely, and few if any details have emerged on exactly what measures are being proposed and which services face “wholesale redesign” in efforts to balance the books. Keeping such information under wraps seems to be a deliberate policy.

By Month 4, BCICS was reporting a year to date deficit of £59m (6.4% of turnover), £19m adrift from the planned level required to deliver a £69m deficit by the end of the year (p104). The Board papers leave us none the wiser about how anybody expects or hopes that this position might improve, or what measures are proposed to bring spending back into line, other than the grim warning “The ICS financial position will require significant work during 2023/24.” (p147)

Coventry & Warwickshire

The ICB’s website is bizarrely located at https://www.happyhealthylives.uk.  July Board meeting heard that the ICB was £6.4m in deficit (and £3.7m adrift from plan) at month 2, and £10.4m in deficit (but just £3.2m adrift) at end of Month 3. The ICB was continuing to forecast break even for the year end. (p22)

However at the September Board meeting the Finance Committee report revealed that the ICB had a £10.7m year to date deficit (Month 4) which was £5.9m adverse to plan. (p78)

The Integrated Performance Report reveals a number of pressures within the reported position such as “Industrial Action, efficiency under delivery, acute sector inflation and agency usage. As well as pressures within the ICB around Primary Care, Pharmacy, Ophthalmic and Dental (POD).” (p83-84)

The University Hospital Coventry & Warwickshire was claiming to be still breaking even at month 4, with its “waste reduction programme” apparently “assumed to be delivered,” even though 37% of it (£21.4m) remains unidentified. Almost uniquely among NHS trusts, UHCW has assumed that the costs of strike action cost (£3.4m April – August) will somehow be mitigated by income from the Elective Recovery Fund. Additional risks such as inflationary pressures (£2m), and emergency pressures are assumed to continue, but are also effectively discounted, with the assumption spending “would be flexed to meet demand and subject to ICB demand management.” (p94-95)

The same happy-go-lucky attitude seems to have been adopted for the wider system efficiency savings, which at month 4 were reporting an underachievement of £7.8m. well over half (54%) of efficiency savings are non-Recurrent, with 19.7% of efficiencies were still unidentified. (p95) So even if the ICS scrapes through 2023/24 with a relatively small deficit compared with others, it is lining up an even bigger challenge as the underlying deficit rolls in to next year.

Derby and Derbyshire

This system, which likes to call itself “Joined Up Care Derbyshire” faced significant financial challenges in 2022/23 winding up with a financial deficit of £31.6m “due to expenditure outside of ICB’s control”, specifically:

– cost of living increases, impact of the national pay award and Covid-19 related costs

– Pressures in prescribing, continuing healthcare fast track packages to support hospital discharge and Section 117 in mental health cases (p48)

This year the prospects are no better: the deficit at Month 3 was £25.5m – £12.9m above the planned level, and the likely outcome was a deficit of £37.3m for 2023/24, although the “owrst case scenario” would be a deficit of £108.1m (p194).

Nonetheless the ICB is still hoping for the best, and forecasting a break-even, while noting “growing material risks:”

• The costs of industrial action
• Excess inflation impacting on CHC, prescribing and mental health
• Efficiency delivery
• Operational pressures
• ERF income due to lower elective activity affected by industrial action (p185)

There is a warning that the consequence of lower ERF income could be “the acute providers could run out of cash before the year end,” and that (for reasons not explained) “The financial position does not include the costs of meeting the unfunded pay award deficit of £13m.” (p185)

The Finance and Estates Committee report tucked away towards the bottom of the Board papers reported that at the end of Month 4 £50m of the target of £136m efficiency savings had still not even been identified, and of those that had been delivered less than half (47%) were recurrent, stacking up more problems for next year.

As a result “It was ultimately acknowledged that the programme delivery boards are not delivering the financial agenda, meaning a rethink of our approach to system wide financial transformation is necessary.” (p238)

Some of the ‘savings’ that are planned represent a gamble with safety and availability of patient care:

“All Trusts are making a concerted effort to reduce agency usage and spend. It has been agreed that there will be no agency usage to cover industrial action from Month 5 and therefore there should be a corresponding reduction on that basis. It is important to note that this approach, however, will create increased risks in relation to elective recovery and potentially patient safety.” (p159)

Derby & Derbyshire remains 183 Whole Time Equivalent posts short of planned staffing levels even after recruiting 277 staff to substantive posts. To cover the gaps there has been an increased use of bank staff, and a much (54%) higher than planned use of agency staff, even though absolute numbers of agency staff have ben reduced.

Herefordshire & Worcestershire

Herefordshire & Worcestershire Integrated Care System (ICS) submitted a “collective stretched deficit plan” aimed at limiting the deficit to £19.2m for the financial year 2023/24. This assumed  £73.1m of efficiencies would be recurrently delivered, with agency expenditure limited no more than £51.2m. (p2)

By Month 4, the system was £9.4m adrift of its target – a £2.8m ICB “adverse variance” and Worcestershire Acute Hospitals NHS Trust (WAHT) £6.4m worse than target at £13.6m deficit. The full year plan astonishingly projects WAHT to break even, while Herefordshire’s Wye Valley Trust was expected to end the year £22m in deficit.

“The board is asked to note that this is becoming increasingly challenging for all … organisations, with the impact of the industrial action (both in terms of cost and capacity), excess inflationary pressures materialising, slippage in delivering efficiency plans and insourcing costs to meet waiting list targets.”

In response to this challenging situation, the Board is promised action … in two months:

“A deep dive across the four organisations reviewing the risks and mitigations to delivery of the planned deficit of £19.2m will be undertaken and reported at Month 6.” (p2)

Board members were told in its July meeting that “the plan is to utilise the independent sector further,” although nobody seemed quite certain about the details of the plan or its cost … or whether it is really a plan at all:

“A plan is in place that is currently around 120% of 2019/2020 activity delivery for the independent sector and, at the moment, part of this is funded through the baseline that was set for the 2023/2024 plans.

“… The initial assumption is that the independent sector are ahead of plan, which indicates that they are undertaking the work and bringing the backlog down as required, but there is now a need to work through and ensure that funding flows to cover that cost.

“Assurance was given that a plan has been built in at this stage.” (p15)

Leicester, Leicestershire and Rutland (LLR) ICB

The month 3 ICS deficit was £25.7m (of which University Hospitals Leicester (UHL) were reporting a £21.9m deficit and the ICB £3.1m), representing a £10.4m adverse variance to plan (p13).

This has rapidly worsened to a Month 5 deficit of £51.6m which is a £31.8m worse than planned.

UHL alone now reports a latest deficit of £36m (£17m adverse variance to plan), while the ICB itself is admitting to a £14.8m deficit (£14.8m adverse variance to plan) – blamed largely on an increase in prescribing costs.

Despite “all system partners … taking action to mitigate risks, strengthening financial controls and delivering increasing levels of financial efficiency as the year progresses,” reality is staring them in the face:

“Given the financial pressures being experienced related to inflation, industrial action, demand and prescribing costs, there is a risk that the ICS may be unable to achieve the £10m planned deficit.” (p318)

Despite the financial pressures spending on independent providers is running high. Asked by a member of the public whether private hospital services might be used to speed treatment of cancer patients, for which University of Leicester NHS Trust ranks 124th out of 141 trusts in England, the answer was that:

“LLR had seen an increase of 171% in independent sector activity in 2022 to 2023 compared to 2019 to 2020 levels. There was a plan for 2023 to 2024 activity levels to reach 185%. Independent sector capacity for cancer treatment was limited but the ICB would continue to explore all clinically appropriate options.” (p6)

Lincolnshire ICB

Despite early financial hopes that the Lincolnshire system was on track “to deliver the Quarter One financial position for the first quarter of the year, and ensure the system “remained on track to meet the criteria to exit Segment Four [the most challenged status] of the NHS National Oversight Framework,” (p19) the situation has worsened.

The ICS reported a deficit of £29.7m at the end of August, £5.1m worse than planned.(p84)

Over the course of the year, very significant additional pressure are arising as a result of industrial action, prescribing and the cost of individual packages of care. The ICB and its partners are seeking to close this net risk position. (p85)

Because no specific measures have been revealed and no details are given, it’s impossible to judge how far this is being done, and if so why Lincolnshire, after years of chronic financial problems should now be one of very few ICBs in the country to have ridden through all the problems virtually unscathed.

Northamptonshire ICB

As early as Month 3 the Northamptonshire ICS had a deficit of £15.9m – more than double the planned level of £7.5m:

“The main drivers of this deficit were the under delivery of efficiency savings, and inflationary pressures above national assumptions, especially in Continuing Healthcare, with complexity, cost and number of packages rising significantly. Cost pressures from Prescribing, the pay award, and costs associated with the industrial strike action also were contributing to the deficit.” (p10)

By Month 5 this had worsened to a £32.2m system deficit, almost four times the planned level of £8.2m. (p143) Each of the trusts was running worse than plan, plus the biggest shortfall against plan was the ICB itself £8.9m worse than planned. (p149)

The System is forecasting to achieve breakeven at the end of the financial year, but currently reporting potential risks after mitigation of £72.6m, largely reflecting excess inflation and additional pressures, industrial action and a shortfall on efficiency delivery. (Highest unmitigated risks inflation in prescribing (£15,824), and failure to deliver efficiency savings (£17,882) (p160)

The ICB has flagged up concerns over the unknown impact of the National Patient Choice Programme, announced by Rishi Sunak in May, which takes effect from October 31.

The ICB’s Delivery and Performance Committee was warned last month that the NPCP could mean as many as 3,000 Northamptonshire patients could be “on the move,” raising questions about depleting budgets of local trusts and unplanned increases in spending on private providers.

The scheme “would enable patients who had been waiting for 40 weeks or more, and met the require clinical and pathway criteria, to request to be referred to another Provider anywhere in the country who had a Commissioning Contract with NHS England or any Integrated Care Board for the required service.

“Patients could access the service via the Patient Initiated Digital Mutual Aid System (PIDMAS) and it was anticipated that Northamptonshire could see as many as 3000 patients on the move. … The National infrastructure to support this was not yet in place and accordingly the Committee reported limited assurance in terms of process and capacity.” (p167)

Nottingham & Nottinghamshire ICB

The ICB plunged swiftly into deficit in 2023/24: “At the end of month two, the NHS system had reported a £29.5 million deficit position, which was £18.9 million adverse to plan.”(p19)

But the pace of increase in the deficit does appear to have slowed, and at the end of month four, the NHS system reported a £41.6 million deficit position, £27.6 million adverse to plan. (p157)

All partners continue to forecast to achieve break-even, despite “significant risk,” with “unmitigated financial risk” estimated at £78.8m. … Key risks include inflation, efficiency, urgent care pressures, elective recovery and CDC [Community Diagnostic Centres] income. (p274)

“Good progress” has been made in the development of efficiency savings plans with a target of £192.8m, of which £177m is now recognised as fully developed or in progress.”

But actual progress is slower: “only 15% of the annual target has been delivered at the end of month 4,” and problems are being stacked up for next year, because “less than half of year to date delivery is recurrent.” (p276)

There is a grim warning about the quality of some private sector provision, with “an increase in the reporting of post operative infections relating to private provider procedures resulting in patients being admitted to NUHT.” (p245)

However the System is “Fully utilising Independent Sector capacity and identifying mutual aid potential across NHS Providers where clinically appropriate2 (p262), and Nottingham University Hospitals reports independent sector activity £1.2m above planned levels (p275)

Shropshire Telford & Wrekin

This chronically challenged ICB has lurched from a £4m adverse variance to plan (£22.9m deficit against a £18.9m deficit plan at month 2 (p17) to a £59.2m deficit, (£23.1m adverse to plan) in month 5.

This is just short of the final system finance plan for a £60m system deficit over the whole year, as submitted to NHS England on May 4 (p90-91), with the system still “awaiting a formal letter from NHS England to recognise that plan.”

Nonetheless the system is still reporting “forecast delivery of the plan but with significant unmitigated risk of £81.8m.” (p51)

Some of the problems centre on adequate arrangements and capacity to discharge patients requiring additional care after discharge and the Finance Committee had undertaken a ‘deep dive’ into discharge and escalation and, in particular, reviewed the activity and funding mechanisms with the Local Authorities. It noted that “all available recurrent funding has been deployed in the finance plan in support of the existing discharge services.”

The current funding levels had been deemed insufficient for capacity required this year, and work was underway to “scope that” and “develop mitigations.” Committee Chair Trevor McMillan “expressed concern that if an agreeable solution is not found between NHS and Local Authority partners this would have a severe impact on the Trust’s ability to discharge patients.” (p95)

Such are the scale and variety of problems confronting the ICB that they appear to have brought in a private management consultant, although what they actually say is that they have

“engaged a strategic partner that specialises in organisational development to support in the delivery of the programme within timeframes. This is currently subject to both strict procurement rules and requiring NHSE sign off. As a result, this cannot be discussed in detail.”

Although the arrangement seems to have been made it is discussed in the future tense as the complex challenge is spelled out:

“The successful provider will have specific experience, skill and expertise around large scale organisational and system redesign, programme management at pace, driving cost efficiency, coupled with professional maturity to deliver on this challenge. They will support in a structured yet timely way through diagnostic, design and implementation phases to develop and implement this programme which will enhance maturity and employment experience for our workforce at all levels.” (p74)

Exactly who this may be, how much they cost and what plans they may hatch up we can only guess. We (and local communities across the ICB who depend on health care) will have to wait and see if anything is divulged, or if the “partnership” is restricted to private meetings with ICB directors and provider chief executives.

Staffordshire and Stoke-on-Trent ICB

The October Board meeting heard of the worsening ICS financial situation (a year-to-date deficit position of £58.6m at month 5, which is a £45.0m adverse variance against the £13.6m deficit plan (compared with a month 4 deficit of £48.7m, £34.1m adrift from the plan).

It noted that:

“The drivers behind this adverse position are slippage on efficiency programmes, the ongoing retention of escalation beds due to urgent and emergency care (UEC) demands, continued health care (CHC) and prescribing inflationary pressures, alongside the Industrial Action that has taken place across the year.”

And unusually the Board took the decision to face facts and stop pretending they can magic away the growing deficits by the end of the year:

“Whilst we are still reporting a forecasted breakeven position, we have completed a thorough review, assessing the run rate, the remaining plan and the risks and mitigations, concluding as a System that we no longer think we can hit a breakeven position at year end as the risk incorporated into our financial plan are realising within the year-to-date position.” (p19)

“After much conversation and thought, we decided to plan for a break-even position in 2023/24, recognising that it is our statutory duty to do so. In agreeing to this plan, we signalled clearly to all parties that it would require a best-case outcome across a range of assumptions.

“Unfortunately, that best case scenario has not played out.

“Most significantly, we have seen excess inflation (inflation above that funded through allocations) of £50m. We’ve also seen the continuation of the trend of recent years where patients requiring Continuing Health Care (CHC) has grown markedly.

“In addition, there have been unforeseen costs of industrial action and further pressures on the acute and mental health care sector. These pressures are mirrored within the local authorities who are also experiencing financial challenge.” (p31)

The conclusion is stark – a hefty deficit forecast this year and much worse again for next year:

“We have concluded that without further action, the NHS partners in the system face a collective deficit of £141m for 2023/24, coupled with a deterioration in our underlying position (ULP) to £237.7m. (p27)

As a result, the ICB has set “the target to save £100m from CHC [Continuing Health Care] in a full year, which if achieved would mean that we spend closer to the average across the Region. However, there is long lead in time before we see that full year effect, and unfortunately it is too late for this to eliminate the outstanding projected deficit that we face. (p27-28)

As at month 5 the full year forecast [CHC] spend is circa £256m before the actions set out in the recovery plan. This has increased from £196m in 2022/23. (p34)

This helps set the scene for a System Recovery Plan focused on the “Big Ticket 7” themes, covering Management of CHC, Integrated Discharge, Admission Avoidance, Care Homes, Falls, Severe Frailty and End of Life and the underpinning projects.  (p27)

It’s fair to say that in any other context than the desperate quest for large scale financial savings the proposals in the Recovery Plan could be viewed in a much more favourable light. But the focus on cash savings winds up with some uncomfortable ideas, not least the grisly phrase

“• Turbo charge end of life programme and link into care planning for elderly and frail people,” which appears to propose accelerating the demise of patients to save money. (p39)

Suspicions mount when we find that end of life patients are to be included on a “fast track” to reduce length of stay, or as the System Improvement Plan puts it:

“Improving the experience and timeliness of support for individuals who are end of life and eligible for fast track.” (p40)

The same table states that a key aim is “Reduction in the average LOS [Length of Stay] for Fast Track patients to 12 weeks or less.”

The ‘Financial Opportunities from CHC’ table on page 48 also fails to offer reassurance that the end of life of some patients is not to be hastened in the hopes of saving the ICS £6m per year:

“The average length of stay of fast track over the target of 12 weeks is currently 36 weeks. It should be offered when end of life is expected within 12 weeks. This cohort of patients should be on FNC [NHS-funded nursing care] care until they reach that EOL status.”

While this may just be awkward and insensitive wording, concerns will not be allayed by the follow-up proposal for what seems like expanding the list of patients officially branded as at death’s door, but is in reality passing more care from hospitals (and trust budgets) to GPs, where it is assumed to be effectively free:

“• Increase in patients identified as EoL [End of Life] on GP registers with improved MDT [Multi Disciplinary Team] management”

To deal with this enlarged list of terminal patients, there is what seems a profoundly ambiguous plan:

“• Offer of 18 additional hospice beds and 200hrs domiciliary care to support urgent and emergency care flow.”

It’s not clear who is to provide the hospice beds (not normally delivered by the NHS), and no expansion of hospice care is proposed in the 5-year Operational Plan, so this seems to be a commitment that is unlikely to be delivered.

Nor is it clear whether the apparently random number of 200 hours of domiciliary care is an annual total to cover all patients, an allocation per end of life patient, or a specific allocation to cover the additional people added to the EoL list to be cared for by GPs. It is equally unclear whether this domiciliary care would be part of existing (normally privatised) services commissioned by the local authority (and thus potentially subject to means-tested charges) or new, dedicated services to be delivered by the NHS.

And while developing alternatives to hospital admission and avoiding A&E admissions where possible for end of life patients is a worthy ambition, it feels uncomfortable to read the plan for what could be seen as a deliberate bottle neck in the system for frail elderly patients:

“• Single point of access for admissions avoidance, to cover support for clinicians as well as development of rapid response services.” (p39)

It’s obvious that the ICS faces massive financial and organisational problems, and its System Recovery Plan does seem, awkward wording aside, to be aiming to improve the services for older patients outside of hospital in order to deliver a better as well as a cheaper service – although a target of £100m savings is a massive challenge.

However the most important lack of clarity, which questions the achievability and viability of the Recovery Plan, is the complete absence of any costings for the service improvements and new services that would need to be put in place. The proposals are only discussed in terms of the number of beds that could be released and the potential saving:

Future growth avoided              £20m

One to one packages                 £14m

Fast Track                                 £6m

High Cost patients                     £44m

Numbers of CHC patients          £25m

Total                             £109m (p48)

But these savings are only achievable through expansion of alternative services, NHS and social care, which have a cost that is completely ignored. Only when and if the savings exceed the extra costs is there a genuine saving, and only when the ICS has the resources to invest up front can any expanded or new services be established.

The current standpoint of NHS England, in targeting any limited extra funds only at the systems that are already performing best and most nearly in financial balance suggests that little extra cash is likely to be coming to Staffordshire and Stoke on Trent.

The Recovery Plan promises more detail in Appendices, although these are not attached to the document, and what seem to be hyperlinks to them do not work.

It is possible, in the absence of any other information, that they are the Appendices to the ICS Joint Forward Plan 2023-28. However neither that Plan nor its Appendices include any costings (other than a discussion of minor capital investments, which are not defined or related to the System Recovery Plan).

Without costings and identifying the source of the necessary funding, and a proper audit of the staffing requirements to make the new proposals work, the Recovery Plan is not a proper plan at all, simply a list of areas where the ICS wishes to cut spending. It’s not clear how far down this road the ICS will travel before hitting that wall of financial affordability.

Without extra funds up front even the most promising schemes cannot progress.

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