Bedfordshire, Luton and Milton Keynes ICB – BLMK
Despite the large apparent long-term gap between needs and resources, referred to above, BLMK ICB claims that the underlying deficit in 2023/24 is as little as £22m, and the efficiency savings required are as low as £18.5m, with just one third of this yet to be identified. (p227)
The July Board papers report that BLMK’s deficit has grown by just £6m, “predominantly due to prescribing pressure”. Many ICBs would be delighted to report such a comparatively healthy situation, but BLMK insists even this scale of deficit is “unsustainable,” and it leaves “no contingency in place to fund redundancies” of ICB staff “following the planned staff consultation” on how to reduce ICB running costs by 30%.” (p232)
NHS England has said there is no additional funding to cover the costs of “restructuring.” (p232)
It seems BLMK is especially concerned to make its financial position look neat and tidy since Milton Keynes University Hospital has “been included in the national New Hospitals Programme, and is awaiting a decision on funding approval from the national team.” (p97-98)
Let’s hope the Board don’t hold their breath waiting for that funding, or hang too many of their hopes and plans on the new hospital, which they are already fearing may not give enough additional capacity unless demand can some how be “mitigated” by diverting some care to community-based services.
Cambridgeshire & Peterborough (C&P)
The July Integrated Performance report reveals C&P ICB is troubled by inadequate capacity both for mental health services (resulting in a rising number of “inappropriate out of area placements”(p5) and a growing waiting list, especially for Dermatology, Ophthalmology, Orthopaedics and Urology. Apparently 86% of the near 147,000 waiting list is for outpatient activity, which is running below plan. (p10)
Cancer waiting times are also worse than target, with skin cancer services at Cambridge University (Addenbrookes) and at North West Anglia (Peterborough) hospitals. An outsourcing contract at Peterborough has come to an end, but the ICB are working with a new private sector day hospital in Peterborough (The Hamptons Hospital) “to develop a tele-dermatology service.” (p15)
Staffing pressures on the mental health trust have forced the temporary closure of a ward, and in addition to out of area placements there has also been an increase in longer lengths of stay, which is not explained but represents a significant cost pressure for the Trust and for the ICS.
C&P is clearly facing a far more demanding situation than BLMK, with its projection of break even in 2023/24 based on £120m of ‘efficiency savings’ – for which there were still no details available for the Board in July to consider. The plan also assumes inflation (including the hefty PFI payments for Peterborough Hospital) at no more than 5%, and acute trusts achieving the elective recovery target of 114% of the activity delivered in 2019/20. (p24)
C&P admits (p26) that “In agreeing a break even position the system is carrying significant risk of £125m,” but exactly how much of that risk has been covered by mitigation will only be revealed at a subsequent ICB meeting.
Hertfordshire & West Essex (HWE) ICB
The July HWE Board meeting was told that the ICS is forecasting an exact break-even for 2023/24, with a surplus of £9.4m to be generated by the ICB, to precisely balance a projected £9.4m deficit by the five NHS providers within its area. (p59-60).
However it’s not quite as simple as that. The system has to deliver “efficiencies” totalling £51.8m during the year, and although one paragraph claims these have been built in to budgets, the next paragraph admits that £8.4m has not yet been built into “individual budgets” – 3 months in to the financial year.
The chances of hitting the financial targets look slim. The ICB documents reveal for example that the numbers and costs of Fast Track packages for Continuing Health Care patients have gone up sharply, with the average monthly cost now 30% above budgeted costs at £4,641 per patient, with two patients alone forecast to cost £780,000 over the year. Costs of jointly-funded patients are also up 24% to an average of £6,432 per month with a maximum of £9,500 per week. There has also been an increase in numbers of fully funded care packages costing over £200,000 each per year, increasing costs by almost £9m in 2023/24. (p189)
The HWE Board are frank enough to admit that some apparent “savings” have been delivered by happy coincidence (unplanned staff vacancies which have reduced running costs, “even though we do not have a fully developed plan to reduce our running costs”. (p192)
Mid and South Essex (MSE) ICB
The July Board papers underline the much more serious financial problems besetting this ICB, which is one of the minority which admitted to NHS England that they could not promise to balance the books and got agreement for a plan expected to deliver a £40m deficit (“a £6m improvement on the outturn position for 2022/23”!).
The Board is warned that their summer will not be an easy one:
“The plan position represents a significant challenge with increasing risks in all parts of our system. MSE Chief Finance Officers will be meeting with the regional team monthly with national escalation meetings scheduled for early August.” (p91)
Already by Month 2 the plan is running at double the planned deficit (£16m rather than the planned £8m), and leading to panic measures:
“Non recurrent measures have been utilised to support the in-year position and a full reconciliation of the underlying position will be reported for month 3. The year-to-date position largely reflects the current shortfall in efficiency programme delivery …” (p93)
Even to deliver a £40m deficit required the MSE System to deliver target efficiencies of £119m.
The Joint Forward Plan included in the ICB’s May Board papers included a frank list of the problems faced by local health chiefs.
“• We are not well resourced in terms of workforce – with particular shortfalls in primary care, and significant nurse, support worker, allied health professionals and in some clinical specialities, medicine vacancy rates. Both recruiting and retaining staff has been problematic in recent years.
- We are challenged operationally – struggling to maintain standards in some areas whilst escalation capacity usually reserved for winter is often required year-round. Length of stay in our services has increased significantly.
- We have a substantial historical structural deficit and we have failed to deliver our financial improvement plans. We have posted a system financial deficit for 2022/23, driven largely by a failure to deliver efficiencies and an over-reliance on bank and agency staffing – underpinned by rising demand in certain areas of care, more complex treatment regimes in some specialities and a failure to prevent chronic disease exacerbation.”
- Our patients have not received the highest quality care in some cases – we have quality and safety challenges across many services.
- We are failing to meet many of the statutory requirements set out in the NHS Constitution.” (p30)
The ICB has been one of those that have been penalised by NHS England for their poor financial performance and as a result: “A key consequence of our deficit is that we have been limited in the investment we have been able to make in transforming health and care.”
As a result of the chronic lack of investment “constrained capital is now creating pressures and limiting our ability to transform due to irretrievable equipment/infrastructure breakdown.”
The ICB fears that another year of failure could lead to intervention by NHS England: “We do not wish to cede control over our operations that is a likely consequence of not resolving our deficit. We wish to retain our autonomy within the agreed NHS framework.”
The bulk of the financial problems, and the greatest challenge in delivering the required savings is the troubled acute provider Mid and South Essex Foundation Trust, which initially projected a £50m deficit. (p295)
Norfolk and Waveney (N&W)
This ICB, chaired by former New Labour health secretary Patricia Hewitt, (whose review of the working of ICBs, commissioned by Jeremy Hunt, has been largely booted into the long grass, with ever tightening control from NHS England rather than the proposed increase in local level decision making), is facing serious and worsening financial problems.
Minutes of the May meeting show the ICB carried forward a deficit of almost £20 million, and had submitted a break-even budget dependent upon delivering 5.1% of “efficiency” savings and carrying “a large amount of risk”. (p10)
And already by Month 2 the deficit of £11.7m is 60% higher than the planned figure, with Queen Elizabeth Hospital Kings Lynn (perhaps one of the more notorious RAAC hospitals, with over 2,400 props holding the roof up) accounting for £1.5m “slippage” in identifying Cost Improvement Programme savings “due to continued pressure on capacity and the impact of RAAC”. (p123)
The efficiency target of £36.7m required to break even is 5% of the ICBs “influenceable expenditure” (p123), whereas historically the target [which they have not achieved] has been 3-3.5% of influenceable spend (p131).
Measures to achieve over 40% of the efficiency target had not yet been identified by July.
N&W’s plan also assumes it can somehow cope with much of another £75m of risk using non-recurrent measures, although this seems much less than convincing when the ICB admits – in the second half of July – that:
“£52.2m of this risk is formed from mitigations which have been entered into the plan, which unless carefully managed will not be achieved. These include achievement of as yet unidentified efficiencies and slippage on investments. The other £22.8m is formed from cost pressures which are not included in the plan, such as non-achievement of identified efficiencies and unplanned inflation.” (p129)
Only if all these challenges are met will the ICS be able to hold down the underlying deficit to £57m carried forward to 2024/25.
It’s clear that the ICB and system leaders are struggling to find ways to cover more than £16m of the efficiency target. It lists possible answers:
Plans to identify the £16.2m gap include
- A close the gap session with all EMT leads
- Finance to meet EMT leads individually for detailed budget review
- Review deferred income on the balance sheet
- Review all contracts £250k and above
- Review PMO opportunities that haven’t moved to the project stage
- Review all discretionary spend
- Review the procurement pipeline
- True-up exercise
However it ends with a warning that if these don’t deliver, they will wind up
- “Exploring less palatable ideas such as restriction policies”. (p130)
Another dire warning is added:
“Despite having a draft breakeven plan, the ICB’s exit underlying position for 23/24 is currently a £57.3m deficit. This is due to the significant non-recurrent measures which have been put in place to achieve the break even plan, which are shown on the list below.
“ This underlying deficit assumes that none of the identified risks materialise and that the ICB delivers its £36.7m efficiency target recurrently. If recurrent risks materialise or any of the efficiency target is not delivered, or is delivered non-recurrently, then the underlying deficit will increase by that amount.” (p131).
N&W is one of the ICBs that includes use of the private (“independent”) sector as a cost pressure. (p192)
Suffolk & North East Essex ICB (SNEE)
This ICB is another with major problems from RAAC in the West Suffolk Hospital, which has been included in the original list of “40 new hospitals” but is nowhere near ready to start building.
SNEE initially projected a £59m system deficit in February, but revised this to break-even, despite an underlying deficit of £52m. (p196)
But the prospects of achieving break-even seem to be evaporating fast, and by Month 2 the ICB had noted a £20m worsening in the underlying deficit, largely because of an increased level of non-recurrent measures used to deliver the proposed savings. (p245)
The local system’s worsening financial problems centre on the West Suffolk Hospital, “which appear to be worsening and these will impact on this financial year and future years. This will require immediate action alongside the development of a multi year programme to address the financial sustainability of the organisation.” (p247)
The ICB is seeking to compensate for lack of capacity at West Suffolk by opening a multi-specialty Elective Surgical Unit at Newmarket Hospital, consisting of a 32-bed inpatient ward and two laminar flow theatres, although this will require additional capital. (p476-7)
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