Humber and North Yorkshire ICB
Minutes of the May Board meeting show the Board increasing the risk rating on the financial deficit for 2023/24 and the impact of the pause on recruitment flowing from the financial deficit from 15 to a maximum 25. (p3)
The ICB had agreed a plan with NHS England that would deliver a £30 million deficit for 2023/24, “albeit with a significant degree of risk, followed by a move to deliver financial balance by the end of 2024/25.” (p4)
By Month 2 the ICB July Finance Report shows providers and the ICB already falling short of their planned savings targets of £160m and £72m respectively (total £232m). However the published figures show more than half of the ICB “savings” and 42% of the provider savings (a total of £107m) are to be non-recurrent – leaving an underlying deficit going forward, regardless of the deal with NHS England. (p9)
To make matters worse the ICB has to look at affordable ways to tackle the neglect and dilapidation of hospital buildings:
“Our estate is ageing. Our accommodation does not meet modern clinical standards, a number of our theatres, ward areas have had to be closed. Across both HUTH [Hull University Teaching Hospitals] and NLaG [North Lincolnshire and Goole] we have a backlog maintenance issue in excess of £200m.
Within Scunthorpe Hospital we have in excess of a £69m critical infrastructure risk which means we cannot make any changes to clinical models of care without significant external capital investment. (p5)
On this basis the ICB is proposing a “Preferred Option” of providing substantial in-patient services [Trauma, medical specialty over 72 hours, Acute surgery requiring stay over 24hrs, Paediatric inpatients over 24hrs] services at Diana Princess of Wales Hospital, Grimsby. This is because it is the only option that satisfies the NHSE financial requirement to fund capital investment internally, with a capital cost of £25m, whereas the cost of consolidating services in Scunthorpe would be £89m, “which cannot be delivered from internal capital resources.” (p6-7)
North East & North Cumbria ICB (NENC)
The Minutes of the May Board show that this area, like Cheshire & Merseyside is another ICB set to lose substantial amounts of funding as a result of “convergence”:
“our growth in funding has been reduced by £19m this year and, as a result of a changing funding formula before Covid, it has been judged that the region has received too much funding in recent years.
“To rectify this position decisions have been made which see an overall reduction of the ICB’s funding allocation to pay back what is deemed as an overpayment in funding and enable this to be redistributed to other parts of the country who may be seeing a growth in an ageing population. Over the past two years this has reduced funding by £100m and next year it is anticipated that a further loss of £60m will be seen.” (p6)
A plan has been agreed with NHS England which will see a deficit of £49.9m in 2023/24, requiring efficiency savings ranging between 4% and 5.7%, and the development of a 3-year financial recovery plan. (p6)
However the July Board Financial report reveals the scale of the challenge, with a savings target of £408m for the year (p72):
“The final submitted financial plan for 2023/24 included overall net financial risks of £102.5m across the ICS. This included a large number of mitigations yet to be identified, excluding those, total unmitigated risk amounts to almost £252m. (p85)
“As at 31 May 2023 this position remains largely unchanged, with net unmitigated risk of £101.6m being reported across the ICS.” (p86)
The ICB is running in crisis mode:
“Additional spending controls (in-line with NHSE expectations) have been agreed in the Executive Committee which in essence have paused all “discretionary” spending until financial risk is mitigated.”
A letter from NHS England spells out what it means for an ICB to be put on the naughty step:
“In addition, because your system did not submit a balanced plan, you will also be required to comply with the following conditions …:
- Review your current processes and arrangements around the pay controls described in the appendix to this letter.
- Ensure that you have a vacancy control panel in place for all recruitment.
- That you apply the agency staffing and additional payment controls stipulated in the appendix to this letter
- Ensure you have an investment oversight panel in place to oversee all non-pay expenditure, with papers shared with NHSE. Within this process we would not expect approval of any non-funded revenue or capital business cases.
- Where revenue or capital cash support is required the additional conditions described in the appendix to this letter will apply. (98-9)
NHS South Yorkshire ICB (SY)
South Yorkshire’s Operating Plan appears to give us a glimpse into the world of an ICB with relatively easy funding, that was able to submit a break-even plan for the system.
“This enabled the receipt of a further £17m of NHS England funding and meant we need to find further savings of £23m to deliver a break-even plan.” (p1)
However it then reveals the catch: even their break-even plan involves delivering a high level of efficiency savings (8.1% of overall system turnover):
“The move to a break even plan means we would need to generate an ICB planned surplus of £62m to compensate for the overall provider planned deficit of £62m.” (p2)
The Joint Forward Plan gives the real picture behind the “balanced plan”:
“The plan contains significant risks. There is a high level of efficiency of £241.2m. This represents 1.7% of allocation at place, 3.6% of allocation in total for the ICB and 4.1% of provider turnover. Total efficiency represents 8.1% of allocation. …
“The ability of the ICB and its hosted providers to deliver an 8.1% efficiency rate will be exceptionally challenging … . The current models of care are not affordable …”(p95)
The Joint Forward Plan also reveals SY is one of few that are actively pursuing a plan for an NHS Elective Orthopaedic Centre in Mexborough, having opened a £5.5m Sheffield EOC in April. (p72)
West Yorkshire ICB
Minutes of the June meeting reveal the decision to ratify the break-even financial plan which had been urgently submitted to NHS England (NHSE) involving “c.7% efficiency savings in year and an associated unmitigated risk of £25m” (p4-5)
A report on the full year 2022/23 was given, noting “£315m of efficiencies had been delivered across the 11 organisations, which was £22m better than planned,” while giving no details of how such substantial savings had been made. (p11)
Month 2 figures from the July meeting show plans already adrift with a deficit £9m higher than the planned £12.5m. (p85)
Only when we get to the Board Assurance Framework do we discover the scale of the challenge:
Balancing the books in 2023/24 requires another £350m of “efficiency” savings, with £175m of unmitigated risks, and depends upon the ICB to deliver a £25m surplus – but there are no actual plans in place to deliver this surplus. (p96-97)
Hence the maximum Black rating for the “risk that the ICS will not deliver the 2023/24 financial requirement of breakeven”, and the risk that “the ICS / ICB will not be able to agree a financial plan for 2023/24 that meets NHS England’s requirements not to exceed its revenue resource limit.”
Also black rated is the “risk of disruption of service provision at Airedale Hospital due to structural RAAC deficiencies resulting in widespread impact across WY as services and patients may need to be reallocated. A planned evacuation could occur due to issues at other RAAC sites across the country or safety concerns raised specifically at Airedale Hospital.
“There is also a risk of a collapse (which could cause injuries to patients and/or staff) and would result in an unplanned evacuation. Severe weather, such as extreme heat or heavy rain or snow, all increase the risk of a RAAC panel becoming unstable and so would result in the ICB having to manage concurrent incidents.” (p100)
Another worrying risk, also black rated, is driven by the financial constraints:
“There is a risk of loss of VCSE services across WY due to lack of long-term funding & investment, and cuts to existing funding, resulting in damage to the ICB mission, poorer health outcomes and increasing health inequalities, alongside ICS reputation for working with VCSE. For context we have an estimated 11,996 VCSE organisations in WY delivering services and support to local communities reducing pressure on GPs and other health services.” (p101)
Concerns over the state of the estate are not limited to Airedale. The Joint Forward Plan notes:
“We have been allocated £158m to invest in 2023/24 on operational capital schemes across our ten NHS providers, and plans have been developed to spend the allocation in full. This level of spend is in the context of backlog maintenance across ten NHS providers of £750m.” (p92)
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