Survey of Integrated Care Boards, Key points:
(East of England, London, East Midlands, North East and Yorkshire and North West regions – part 1 of 2)
- 18 out of the 23 ICBs surveyed finished the financial year in deficit. and 10 already forecast bigger deficits for 2024-25.
- Greater Manchester: “the ICS finds itself starting from a significant underlying financial deficit position of £610m.
- To tackle their debts there is emerging evidence that ICBs and their members are discussing bed cuts, recruitment freezes and job losses at all levels. but the current public information lacks openness and clarity,
A new Lowdown survey of published Integrated Care Board papers has given an insight into the growing finance problems facing the NHS.
2023/24
The first part of the survey, covering 23 of the 42 ICBs (in East of England, London, East Midlands, North East and Yorkshire and North West) found just five ICBs expected to end 2023/24 in balance or with a tiny surplus (Cambridgeshire & Peterborough, Hertfordshire & West Essex, Suffolk & North East Essex, North West London and Humber & North Yorkshire), with the remaining 18 having ended up in the red.
This comes despite NHS England pumping additional funds in to address forecast deficits, and refunding much if not all of the costs of the waves of industrial action by doctors and other professional staff.
However these belated extra handouts don’t cover unfunded inflation in costs and pay bills, or change the reality of under-funding. Indeed, according to the Health Foundation’s REAL centre “Between 2022/23 and 2024/25, when adjusted for population size and ageing, the planned NHS England budget will have decreased by an average of 1.6% per year in real terms.”
Outlook for this year
So the picture is even worse coming into the current year 2024/25. To judge from their published papers (as of May 9) ten out of the 23 ICBs in our survey are set for deficits totalling up to £1.24 billion, and ranging from £37.5 million to £298 million, with none of the remaining 13 explicitly forecasting a break-even.
This corresponds with rumours and estimates that NHS England is still trying to squeeze down spending by ICBs and trusts to tackle a potential total £4.5 billion deficit.
Many of the ICBs that have failed to publish plans or projections for 24/25 (or kept them secret) refer to “underlying” deficits, resulting from having scraped through 2023/24 on the basis of one-off, “non-recurrent” savings or adjustments, while others are carrying deficits forward into an already difficult year.
Hertfordshire & West Essex, for example, while projecting break-even for 23/24, warns of a £97m deficit across the system in 24/25, including “an underlying exit rate of £146.1m deficit.” (p160)
North East London (with a £200m underlying deficit) admits: “We currently have a blend of health and care provision for our population that is unaffordable, with a significant underlying deficit across health and care providers.” (p75)
Perhaps even worse South East London ICB’s (undisclosed) 2024/25 plans lock the system into ongoing deficits, and “leave SEL with a continuing underlying deficit which will need to be addressed as a system going forwards.” (p27)
South East London also offers readers the quaint description of its system deficit of £108.5m as “£101m adverse to a planned £7.5m deficit.” (p93)
North East and North Cumbria ICB also “expect 2024/25 to be a very challenging year financially given the scale of underlying financial pressures.”
Lancashire & South Cumbria, which was expecting to overshoot a target maximum deficit of £118.5m by £30m, even after receipt of £80m towards its deficit from NHS England, is expecting a £95m planning gap for 24/25, and with 70% (£153m out of £220m) of “mitigations” consisting of non-recurrent measures (and risky ones such as “remove contingency”). (p7)
But the most massive of all the financial problems revealed in ICB papers is in Greater Manchester, which admits “the ICS finds itself starting from a significant underlying financial deficit position of £610m, of which £150m is attributable to the ICB and £460m to providers.” (p21)
Efficiency savings and cuts
Even those systems that seem to have come out of last year relatively well, with no deficit, face problems coping this year. Cambridgeshire & Peterborough ICB admit that to break even would require them to hit an eye-watering £136m target for “efficiencies” (6.8% of turnover – a level not previously reached) (p21).
Norfolk and Waveney ICB, which presents a most confusing financial situation (deteriorating in Month 9 to a £102m deficit (p342), but apparently forecasting an outturn of just £5.7m in the red) has been seeking to save money by closing beds.(p345)
North West London’s draft financial plan also includes reduction of number of physical beds open (p20) as part of its plan to limit its deficit to £80m in 2024/25 (with the ICB £37.4m in surplus and providers £117.7m in the red) (p3). But even this rests on the assumption it can also reduce the number of whole time equivalent jobs by 3,000 (p2).
NW London are not alone. A recent Health Service Journal survey asking 43 chief executives, chairs, medical directors, and finance and nursing chiefs across 39 of 42 ICBs about significant plans for the coming 12–18 months 85 per cent said they would reduce agency staff spending via system-wide spending controls; 42 per cent were also planning cuts to numbers of non-clinical substantive staff and almost a third (32%) planned to reduce clinical substantive staff.
Cheshire & Merseyside ICB’s plans to contain a projected £277m deficit in 2024/25 include keeping a “full vacancy freeze in place,” despite its impact on the workforce strategy. (p49)
Worryingly NW London ICB does not define which jobs should be axed (clinical? non-clinical? senior or lower paid?), in which sector these cutbacks should fall, or the basis on which this very round target figure has been calculated. Apparently “the submitted workforce plan does not reduce the WTE in line with the planning intentions,” and as a result “there is a process in place to work through with each organisation.” (p3) The mystery deepens.
NW London ICB does reveal that out of a total £207m efficiency target for 24/25, schemes had only been identified for £108m, with community and (already under-funded) mental health services (p19) having identified less than 40% of the required savings (p3).
Suffolk and North East Essex’s Draft Joint Forward Plan (p29) seems braced for a funding reduction of £97m in 2024/25, but does not explicitly state what the financial position is, or what the ICB and its providers propose to do about it.
Lack of transparency
This lack of candour or concrete proposals runs through almost every ICB facing financial pressures. Sometimes ICBs list the ‘drivers’ of deficits. Occasionally they seek to blame industrial action or the crisis in one or more provider trusts for the problem: but aside from Northwest London’s gnomic call for 3,000 jobs to be axed not a clue is given on how tens of millions of pounds can the “saved” – or indeed what the impact might be on services, patients and staff.
Perhaps more shocking is how few of the ICBs have published any clear information on the financial situation in the new financial year that began last month. Only ten of the 23 ICBs have published any form of forecast – with many of these being only the first submission of plans to NHS England – and all ten are looking at deficits, raging from £37.5m to £298m.
Keeping staff, health unions and professional bodies, patients, and the wider public in the dark may seem to have some appeal to desperate ICB and trust directors who are reluctant to reveal the truth.
Some must hope that by rolling out unpopular changes piece by piece they can avoid scrutiny and loud local campaigns. Maybe they even hope to catch staff unawares and minimise any resistance to job losses or attacks on staffing levels or working conditions.
But leaving staff to find out by dribs and drabs as jobs and staffing levels are axed means stories will inevitably leak into local and even national press headlines, leaving patients and the public even more angry.
As the general election approaches, clear statements of the scale of the problem in each area and spelling out the likely consequences give local politicians and campaigners a chance to pile on the pressure for more funding and fight in defence of local services. Keeping the problem secret denies local communities any possibility of standing up for themselves and criticising the ICB’s (or trusts’) assumptions and proposals.
Sadly the lack of any clear information in the bulk of ICBs suggests that some may have followed the example of West Yorkshire ICB, which has revealed that it faces initial financial challenges “in the region of £400m” in 2024/25 and warned that achieving break-even is a “significant challenge” – but then opted to hear key items for its March 19 meeting (including Joint Forward Plan and Quality Update) and ALL of the business of its ‘Extraordinary’ 29 April Board meeting in secret session.
Nottingham & Nottinghamshire ICB’s May Board papers also at several points make clear that key discussions have been held and decisions taken in closed session, with no access for the press or public:
“2024/25 Operational and Financial Plans – Following discussion at meetings of the Board on 14 March and the Finance and Performance Committee on 21 March, the Chair and Chief Executive approved the submission to NHS England … Following further discussion at the Finance and Performance Committee on 24 April, the Chair and Chief Executive approved the final submission to meet the deadline of 2 May 2024.
“The final plans have been shared with Board members separately.” (p52)
The Month 12 financial report, revealing a £113.7 million outturn deficit “should be read in conjunction with the full Integrated Performance Report, which is provided for Board members separately.” (p234)
Bedfordshire, Luton & Milton Keynes ICB (BLMK) seem to have adopted a similar stance: at its March meeting it promised more details of the Operational Plan would be provided in “the private part of the 22 March Board meeting” – so no minutes have been published. And, after warning of “the potential for difficult and unpalatable decisions in 2024/25,” (p71) on “investments and dis-investments/decommissioning on grounds of affordability and value for money,” it agreed to delegate the finalising and approval of the 24/25 Operational Plan to the ICB Chief Executive.
Since BLMK ICB is one of a few that only meet quarterly, and won’t meet again until June, this means no hard information for patients or staff on the plans for 2024/25, and exactly what may be disinvested in, cut or decommissioned, will be revealed to health staff or the wider public until the plan is a fait accompli. Even then it seems the plan as a whole may be kept under wraps.
Wherever ICBs (or trusts) resort to this type of secrecy it does of course have a downside for them. It undermines their attempts at “integration” and “partnership” with local government and exposes the NHS body as the sole body responsible for any consequences. And it means that there is no consensus or shared commitment to the plan, and it cannot be used as a way to encourage or press staff (or patients or the wider public) to accept controversial changes.
Of course, ICBs chiefly operate as commissioners of services, and while they, as organisations, need to cut their running costs, any substantial efficiency savings or outright cuts need to be carried out by providers.
Nottingham & Nottinghamshire ICB for example, heard reports of a Month 8 deficit of £100.9 million, a deterioration in the previously reported position. All four statutory NHS organisations across the ICS were all reporting year-to-date deficit positions. But the main drivers of the adverse position were listed as: inflationary costs, industrial action, mental health sub-contracted beds, urgent and emergency care escalation beds remaining open, and unfunded workforce and pay increases.
NHS Trusts bear the brunt
All of the heavy lifting in tackling any of these inevitably falls on to the trusts.
To gain a full picture of the way ICB plans are working through we need to look at board papers and management statements in hospital trusts such as Guys and St Thomas’s (GSST)and King’s College Hospital in southeast London.
King’s planned to cut 600 mainly clinical posts in an effort to tackle last year’s deficit, while information sent to staff reveals GSST needs to cut its staffing costs by a third (£55m) as part of its efforts to tackle an £84m deficit this year.
One of the major reasons for ICBs and providers not hitting the financial targets they hoped to has been their ridiculously over-optimistic targets for so-called “efficiency savings”.
Again most of the impact of this is implemented and felt at trust level, although Lowdown has heard of no serious assessments of what the impact has been on patient care from year after year of “savings”.
In South East London for example, by month 11 the system was falling £68.5m behind the year-to-date target of £293.3m savings, and more than a third of the savings were non-recurrent, leaving more problems for 24/25 (p99). But there is no clear statement on how the savings have been made, what has been affected, and whether for better or worse.
Staffing is a target for savings in many other trusts, too. Mid and South Essex FT’s response to a 24/25 financial plan showing a deficit position is to seek ways to reduce the cost of staff especially the temporary staff spend (p6). The Trust is one of a growing number under special measures, with NHS England intervening in an effort to curb spending. (p17)
Of course staff and staffing levels are also implicitly at the centre of all plans for “efficiency” savings and calls for increased “productivity”, which range in their level of ambition and the extent to which they are linked with tangible and viable proposals: insofar as ICBs offer any detail, most are just abstract lists. But the same is true of the trusts that need to deliver them in practice.
It’s worth noting that the deadpan delivery of information is ideal for some ICB health chiefs seeking to pat themselves on the back. Let’s congratulate Lincolnshire ICB for the classic statement claiming credit for reducing a deficit – by receiving a payment:
“The ICS has improved this position by £15.4m in Month 11 due to the ICS receiving funding from NHS England for the initial planned deficit in month. … The £14.1m improvement is due to the year-to-date impact of receiving the £15.4m funding in month 11.”
As the pressure from NHS England demanding cash savings collides with the normal pre-election pressure to avoid visible cutbacks and closures, and with the pressures felt by trusts seeking to avoid embarrassing headlines and win plaudits by reducing delays in A&E and cutting waiting lists, it’s far from clear how far the potential for significant cutbacks will become a reality.
What we can say if these 23 ICBs are in any way typical is that most seem determined to publish as little information as they can get away with, as late as possible, and in a language so arcane that only a few journalists and clued up campaigners will be able to assess the real situation.
This means that even the notional trappings of accountability to local communities and the wider public (board meetings in public, publishing papers) are being circumvented by many ICBs. To get a real picture of what’s happening and potential impact on patients and staff we need to combine close monitoring of all 42 ICBs with liaison with health workers and their unions, who will see and feel many of the changes first. The Lowdown welcomes any information that staff wish to share or expose. Contact us in confidence at: [email protected]
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