South West – ICBs

Key points – ICS financial update

1. Due to the number of ICSs under extreme financial pressures and managing deficits, NHS England agreed on new financial targets (control totals) for the end of the financial year (2024/5), which allowed for deficits in many cases.
2.  Even with an agreed-upon deficit, some ICSs are still off course, with a worsening financial position (variance from control total).
3. Each ICS has also been required to improve productivity and make substantial savings. Our researchers across all 42 ICS have target savings totalling around £8bn, with the biggest impact on workforce budgets.

What are the reasons that ICBs give for their financial positions?

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NHS Bath and North East Somerset, Swindon and Wiltshire ICB

Control Total (24/25)	Current variance from C Total	Month	YTD Deficit (£ million)	Savings Target
Deficit of £30m11.6	3	5	21.1	£141.9m

 

Having agreed on a control total of £30m deficit with NHS England (reduced from the initial plan of £35.7m), BANESSW ICB reported a Month 4 deficit of £21.1m, £7.1m adverse to plan.

Month 6

The year-to-date adverse variance of £11.6m was noted. Recognising the pro-rata £30m deficit funding, the adverse variance to plan from Month 5 to Month 6 is £3m behind the system-revised target.

The £11.6 adverse position is driven by £4.3m unachieved Cost improvement steps (CIPs), £4.7m drugs and clinical supplies, £1.6m agency costs and £1m from others, which includes £0.6m income pressures.

“We are re-forecasting and it is unlikely we will hit our planned number, we are aiming to be below a £40m deficit (once we add back deficit funding) and there are a series of actions via Recovery Board”: … …

Providers are working to stretch targets; however, at Month 6, none of the providers have reported this as delivered.

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Month 4

Delivering the planned outcome for 2024/25 requires the ICS to achieve “efficiency savings of £140m (7%). However, by month 4, despite only £3.5m of additional savings still to be identified, there is a warning:

“Our forecast profile remains high risk as the improvements which flow from our recovery actions are overly profiled into the last 4 months of the year.”

To make matters worse the ICB is already building a problem for next year, since just 51% of savings are recurrent.

The most discussed factor driving the deficit is increased Urgent and Emergency Care (UEC) demand, which is impeding trusts’ efforts to crank up elective work.

There is also a problem with discharging patients after treatment: the ICB has set a target for no more than 9% of beds to be occupied by “non-criteria to reside” patients, but this is currently running higher with actions in place to reduce.

The ICB reports that a “transitional funding arrangement” was in place with the acute trusts “as they transition to a lower cost base.”

One key area of cost reduction is workforce, with a target for reducing agency, bank, and non-clinical staff. The plan is for the substantive workforce to be reduced by 1.9%/281 whole time equivalent (WTE), the bank by 39% /418 WTE, and the agency by 35%/ 65 WTE. Each provider within the ICS has workforce reductions listed.

Another problem is Continuing Healthcare Costs. Negotiations are being pursued with LAs to reduce what ICS pays for CHC. More savings are sought from increasing the number of virtual wards.

“Improving elective productivity to generate ERF income and reducing UEC demand and improving flow (CIP) continue to be main areas of focus, alongside the related focus on reducing workforce costs. “

The ICS is focused primarily on increasing elective activity in acute services: “Improving elective productivity to generate ERF income and reducing UEC demand and improving flow (CIP) continue to be our main areas of focus, alongside the related focus on reducing workforce costs.”

BANESW ICS is also one of the most avid users of private providers, having just awarded a 9-year £1.3bn contract to private equity-owned HCRG Care, to lead all adult and community services across the ICS.

 

NHS Bristol, North Somerset and South Gloucestershire ICB

Control Total (24/25)	Current variance from C Total	Month	YTD Deficit (£ million)	Savings Target
Break-even	12.4	5	12.4	£101.4m

This ICS has committed to a breakeven target for 24/25, and is still forecasting it will deliver: but at Month 5, the system is reporting a year-to-date deficit of £12.4m (down from £13m in Month 4), incorporating a marginal ICB deficit (£0.043m) and a provider position of £12.336m.

To deliver the end-of-year balance, the ICS depends upon cost savings of £101.4m (of which 92% are recurrent), with an ICB share of £32.966m.

The October Board papers have warnings that the system is under-delivering against planned savings targets, and under-performing against planned levels of elective activity.

Total worked whole time equivalent (WTE) numbers (including temporary staff) “continue to be in excess of funded levels,” driving a year-to-date overspend of £16.7m against total pay budgets. Indeed, the latest figures show spending on Bank staff forecast to be significantly UP (+£35m FOT) as agency spending falls.

Other factors leading to a Month 5 deficit £1.8m direct costs of industrial action, £11.8m slippage on savings, £3.4m ERF, £2.4m pay related costs, offset by £7.1m income and other items

The system’s non-pay savings target (and the gap from the target) are both much larger than the pay target, and the level of success is much lower (39% compared with 96%).

Even though the potential deficit is minimal compared with many other ICBs the Board has been threatened with dire consequences of failure and is preparing a “system-wide recovery plan:”

“This plan will identify, with the help of an external facilitator, opportunities for further grip and control. If this fails to deliver system breakeven there will be intervention by NHS England, the board will lose much control over spending and spending controls will be imposed.”

 

NHS Cornwall and Isles of Scilly

Control Total (24/25)	Current variance from C Total	Month	YTD Deficit (£ million)	Savings Target
Break even	3.9	5		£65m

Having agreed a break-even plan, CIOS ICS was £3.9m adrift from plan at Month 5 (largely driven by Royal Cornwall Hospitals).

The system’s efficiency savings target is £65m and by Month 6, CIP cumulative position is “£0.951m over performance” for the year to date. However, “There remains a concern that level of recurrent v non-recurrent savings (RCHT 41%, target 60% recurrent, CFT 49% recurrent – target 77%)”

There was no financial report  to the November Board, but the October report noted the key areas of pressure:

• mental health placement costs,
• prescribing
• and intermediate care expenditure.

At present these were being mitigated by “underspends in other areas, including continuing healthcare.”

No details have been given on what measures have been taken to deliver “efficiency savings,” which aim to reduce costs by £79m in 24/25, through:

• remodelling services (£25.207m),
• Contracting efficiencies (£7.765m),
• medicines/consumables (£5.07 m),
• estates/IT (£1.344m),
• corporate (£3.734m),
• technical adjustment (£10.095m).

The squeeze is also being systematically put on workforce costs with a range of measures (aimed at saving £26m):

• Vacancy freezes on all recruitment for 3 months
• No HCA agency usage since the 1st of June 2024.
• Targeted work via the workforce efficiencies programme on rate caps and adoption of further reductions in rates from July 24.
• Agreement by the Executive team and endorsement from the Board to a targeted return, at the Trust level, to at least the April 2023 headcount position. Currently, c170 WTE is lower than the June 2024 position.

The ICS is also seeking to tackle non-pay spending: all discretionary non-pay spending has ceased, including rationalisation of corporate credit cards and tightening of controls on legal advice requests.

Continuing Healthcare costs are a target for reduction as increasing complexity is increasing costs: the ICS plans to “pick this up” with LA. Key interventions have already been instigated: –

But “in line with the NHSE expectation that a full review of all investment decisions from 2019/20 to date are reviewed to ensure they are still fit for purpose; we will undertake this in early October.”

Alongside of this CIOS ICB has its own unique reading of the Triple Lock process, which they interpret as: “any new investments will be expected to have corresponding dis-investments to ensure they are affordable and appropriate for the system.”

 

NHS Devon ICB

Control Total (24/25)	Current variance from C Total	Month	YTD Deficit (£ million)	Savings Target
Deficit £80	2.8	4	54.6	£213m

This financially troubled ICS has committed to limiting its deficit to £80m, including the ICB delivering a surplus of £28.4m.

This is dependent upon releasing £213m in “efficiency savings,” equivalent to 7.4% of turnover, which is larger than the savings delivered last year. The ICB itself has to deliver £75m in savings.

“Given the system’s historic performance in delivering its CIP targets, there is a risk that this will not be achieved:” however, the ICS is reporting £33.4m efficiency achievement in the first quarter of the
year, £0.2m above plan and the forecast is to achieve the full target savings.

At month 4, the One Devon ICS is reporting a year-to-date £54.6m deficit against a planned deficit of £51.8m. All 3 acute trusts are forecasting year-end deficits (Royal Devon £9.7m; University Hospitals Plymouth £54.6m; Torbay £47.6m).

Devon’s chronic service and financial pressures have resulted in the system being placed in the highest tier (Segment 4) of the NHS Oversight Framework (NOF4).

The continued deficits are blamed on a number of factors, many of them outside of the control of the NHS:

• Our growing and ageing population means that we are caring for more people than ever before who are living with complex conditions, leading to unprecedented pressure on services.

Other pressures include:

• Inflation increases above funded levels;
• Fragile services due to workforce shortages in specific specialities;
• Growing demand for services makes reducing waiting lists challenging;
• UEC pressures and ambulance handover delays;
• Price and volume increases for drugs and prescribing;
• Cost and volume of CHC placements and care market availability;
• Backlogs in assessments, particularly in Children and Young Persons.

In response, the ICS is seeking to squeeze savings. Despite the workforce shortages, the Workforce Delivery Group “is focused on 5 priority areas that will drive down both workforce numbers and costs.” The aim is to reduce agency use and use a ‘System Vacancy Control Panel’ to prevent an increase in workforce growth.

Continuing Healthcare (CHC) is another major target for cost reduction. It aims to reduce client numbers and “optimise” the use of and expenditure on Medicines.

The ICS has a ‘Triple Lock Sign-Off Process’ in place for all revenue investments above £100k, with sign-off required by the organisation, system and the NHS England (NHSE) regional team.

The ICB claims the Cost Improvement Programmes (CIPS) in place aim to identify and implement measures to achieve cost savings and efficiency improvements “while maintaining or enhancing the quality of healthcare services provided to patients.”

Without details on the actual proposals or the extent to which there has been any impact assessment, it is impossible to assess whether this objective can be achieved.

NHS Dorset ICB

Control Total (24/25)	Current variance from C Total	Month	YTD Deficit (£ million)	Savings Target (£m)
Deficit £20.3m	6.1	5	15	131.2

Agreed plan to limit 2024/25 deficit to £20.3m, but November Board papers warn of “a risk adjusted internal forecast of £67.3m against our planned deficit of £21.3m”.

Achieving the target deficit requires the ICS to deliver “efficiency savings” of £131.2m, of which the aim is for 69% to be recurrent.

However November ICB papers warn: “roughly two thirds of efficiencies [are] planned to deliver in the last 6 months in the year and 23% of the year efficiencies delivered YTD. Any delay to or reduced impact of these schemes planned to begin later in the financial year will be harder for the system to recover should they under-deliver.”

The increase in costs since 2023/24 are largely driven by “an increase in non-pay procurement (10.4% growth, 2% weighted), which will be investigated further.” By contrast pay costs in the South West have increased by 1.5%, representing a weighted expenditure growth of 0.9%.

Other pressures include inflationary costs, escalated beds and high drug costs, of which some are patient specific and therefore unavoidable.

One of the key savings targets was to reduce the ICS workforce by 758: however that effort appears to have stalled in the second quarter of 24/25:

“Comparing end August with end July position there has been a net increase in WTE of 38 WTE. The year-to-date position shows there is a total reduction of 226 WTE compared to 264 WTE in July.” However the planned reduction of agency staff has been successful, with 370 WTE Agency staff at month 5, 86 fewer than the planned 456.

Meanwhile the numbers of vacancies are increasing across the 3 NHS providers. As at M05 there were 1,426 WTE / 7.4% vacancies.

Other ambitions to reduce costs include

• plans to reduce Mental health out of area placements and use of private providers
• and seeking ways to save £44.6m from Personal health commissioning.

The current (risk adjusted) internal forecast outturn for the ICB suggests a deficit of £88.7m, £67.3m adrift from the planned £21.3m deficit, but slightly lower than the equivalent estimate in Month 3.

And while the savings targets are broken down by organisation, the lack of any clear detail on how efficiency savings are being sought suggests that the target will be missed: the only question is by how much.

 

NHS Gloucestershire ICB

Control Total (24/25)	Current variance from C Total	Month	YTD Deficit (£ million)	Savings Target (£m)
Break even	0.3	5	0.3	93.2

This ICB has agreed on a break-even target for 24/25, after NHS England rejected an initial plan for £28m deficit. The break-even depends upon achieving efficiency savings of £93.2m but also

“assumes full funding for the 24/25 pay award, ERF over delivery and industrial action.”

And while “Slippage in delivery of the Working as One savings is forecast,” the ICB Board has been assured there is “work underway to mitigate identified slippage.”

However, two-thirds of GHFT-achieved savings are non-recurrent, … and the programme is weighted into the second half of the year. In addition, more than 20% of it (£19.6m) is red-rated as high risk.

The most recent Board papers reveal no real discussion of drivers or increasing cost pressures, suggesting perhaps that any discussions are taking place in the board’s closed sessions, away from any public or trade union scrutiny.

The Board and public have been told that “recovery actions” are in place within organisations to manage expenditures in accordance with plans and identify schemes for unidentified savings.

There has been some slippage against the ‘working as one’ savings targets, which are currently being assessed, while “non-recurrent mitigations” are progressing in an effort to break even. As with most ICBs, no details of savings plans are given, and it is impossible to gauge their impact or likelihood of success.

Controls are in place to limit spending on prescribing, continuing healthcare (CHC), and workforce – but it is unclear what the controls are, although they probably include limits on agency and bank staff. Agency expenditure is reducing in both the local trusts and remains below 3.2% national cap

While full delivery of efficiency plans by year-end is forecast, almost half (46%) of total savings are non-recurrent, which raises questions about the underlying financial position going forward.

 

NHS Somerset ICB

Control Total (24/25)	Current variance from C Total	Month	YTD Deficit (£ million)	Savings Target
Break even	1.2	4	1.2	51

This least communicative of ICBs has set a break-even plan for 2024/25 and reported a YTD deficit of £1.2m in Month 4, resulting from Industrial Action. But beneath the complacency there seems to be an unresolved problem of underfunding.

The Joint Forward Plan (in May Board papers) warned: “Over the coming three years, we need to address our underlying financial deficit, which stands at about £80 million.“

Despite this, no clear target for efficiency savings is revealed in current board papers. The Medium Term Financial Plan (MTFP) included in the May Board papers reveals a Cost Improvement Plan (CIP) target of £51m to deliver £11.3m deficit in 2024/25 (followed by similar-sized savings targets for the next three years).

This suggests the plan for break-even must require a correspondingly higher target saving – £62m.

At month 4 the year-to-date NHS Somerset’s total savings programme was behind plan by £0.3m, with a shortfall of £3.5m in recurrent savings. Total recurrent delivery is estimated to be £8.7m lower than plan, driven by ‘unidentified savings’ at month 4 of £8.4m: this strongly suggests the break-even target for the end of the year is over-optimistic.

The MTFP reveals that “Work had been undertaken to assess the causes of the deficit in Somerset,” which confirms that the following factors remain key, despite not being openly discussed by the ICB Board:

• Structural costs, predominantly “the unavoidable inefficient cost of sub-scale services which are necessary to ensure appropriate provision and access across the geography of Somerset” and “Private Finance Initiative costs at SFT”.
• Challenges in recruitment and retention
• Workforce availability to support sustainable primary care services.
• Inefficiencies created by the existence of sub-scale and duplicate services
• Historic non-delivery of recurrent efficiency savings and reliance on non-recurrent solutions
• The productivity and cost impacts of underutilised and expensive estate.

Despite this background information and underlying pressure the ICB stubbornly avoids any detailed discussion of efficiency savings plans.

But the ICB is also more honest and serious than others in that it is one of very few to pay serious attention to the local authority’s financial plight, which is especially serious.

The May Board papers report Somerset Council had declared a financial emergency due to the rising cost of caring for adults and children in the county. Following this announcement, they have had to reduce costs rapidly to deliver a £100-million savings programme to avoid effectively declaring themselves bankrupt.

This, in turn, severely limits the extent to which local government can ease the discharge of vulnerable patients from acute hospital care or do more than the statutory minimum to address inequalities and improve public health.

In another welcome outburst of honesty, Somerset Foundation Trust chief executive Peter Lewis has told a Health Service Journal discussion that there was “no point” in having “honest conversations” with NHS England when putting together annual financial plans. His trust and the system had

“made a conscious decision to focus on “closing the gap” by simply adjusting the financial plan – and not to address the funding and demand pressures that were the underlying cause of much of its financial and performance problems.”

It would help local people if that frankness were not also applied to ICB and trust board meetings, spelling out the scale of the financial challenge and the potential implications of attempting to cut spending to balance the books this year and in years to come.

 

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OCTOBER 2023

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South West ICBs –  a postcode lottery

This latest Lowdown survey of the seven Integrated Care Boards (ICBs) covering the South West of England has revealed a complete spectrum of situations, plans, proposals and solutions to the generic problems facing all ICBs – historic under-funding, inflation, inadequate capacity, staff shortages, gaps in social care, and NHS England pressure to cut spending to match budgets.

The financial situation of Integrated Care Systems (ICSs), according to the most recent published reports, range from a deficit of just £2.8m in Gloucestershire to £39.7m in Devon, while Cornwall and Isles of Scilly reports only a “variation from plan” (£5.1m) rather than a deficit. Somerset is the only ICS in England to identify the scale of the local authority’s current (£26m) deficit on social care and include it in an ICS total, bringing the deficit up to £34.5m.

The combined deficits from 6 of the 7 South West ICBs that reported a figure was £164m: in several of the ICBs this has been enough to result in various efforts to save money, including plans in mental health to substitute HCAs for high-cost agency RMNs (Bath and NE Somerset p99) and various plans to cut bed numbers, relying on Discharge to Assess.

One common factor running through all of the South West systems is that almost none of the plans for so-called “efficiency savings” are clearly explained, nor are the potential costs of new systems revealed. This problem affects even schemes that appear promising such as Cornwall’s Mental Health Concordat, Devon’s Winter Plan to work around a shortfall in bed numbers this coming winter, and Dorset’s plan for ‘Integrated Neighbourhood Teams’.

In each case if any financial figures quoted they are only listing the level of savings each ICB hopes will be generated from the scheme. But without a serious estimate of capital and revenue costs – along with staffing requirements – it is impossible to judge the chances that the potential benefits may actually be delivered.

 

Bath and North East Somerset, Swindon and Wiltshire (BSWICB)

The September ICB Board heard that the first draft of the Medium-Term Financial Plan was submitted to the NHS England regional team on the 8th September 2023. It is a three-year plan; Year 1 of the plan is 2023/24.

However there are serious problems to confront, not least the need to “invest” to expand some services:

“We are developing our medium term financial plan in the context of striving to address our existing financial deficit and our productivity gaps, as well as aiming to deliver on our strategic ambition of improving outcomes and increasing our focus on prevention and early intervention.

“This will, in the long term, help to curtail growth in secondary care ….

“To facilitate this shift, we need to invest in prevention and early intervention, dealing with the current demand on our acute services, whilst also developing our productivity and cost reduction schemes.”

However, all this is much easier said than done: “at this stage it appears unlikely that BSW will be able to present a balanced plan within 3 years.” (p22)

The Month 4 system deficit was £19.8m, £11.1m worse than the planned deficit, and the increasingly faint hopes of the system breaking even depend upon achieving £96.3m of efficiencies (equivalent to 5.1% of the ICS allocation). (p197)

The other problem is that over a third of the efficiencies planned are non-recurrent, piling up more problems for next year and beyond, 21% are seen as “high risk”, and over 8% were either still unidentified or only listed as “opportunities” at Month 4.

BSWICB reports that the main issue knocking budgets off course has been prescribing prices (£3.8m by month 4) along with Industrial Action £2.4m, and costs of Agency staff £1.9m. (p200) Elsewhere the ICB is warned that the local full year cost of prescribing inflation could be more than £10m. (p21)

However there are no reserves or contingency to manage the financial position so the deterioration in the year-to-date position has resulted in more short term stopgap solutions: “the deviation from plan being managed by non-recurrent measures.” (p200)

Use of the independent sector to help achieve the elective care target of 107% of 2019/20 levels is listed as a risk that could leave the ICS with a bill: “over-performance on the independent sector … will be funded nationally only if we exceed our elective target.” The potential risk at Month 4 was £4m. (p21)

The independent sector (undefined as to which services are involved) was running at 130% of plan at Month 4, after a recent highest month of 160%: this makes the process of attempting to balance the books of the system even more complicated. (p207)

Agency staff

BSWICB is openly looking at substituting less qualified staff in mental health care, to save money: “AWP [Avon and Wiltshire Partnership] are exploring the option of supplying senior HCA to the acute partners to reduce the reliance on high-cost agency RMNs, this should also have benefits on AWPs workforce, with less RMN usage within the acutes [acute hospitals].”  (p99)

 

Bristol, North Somerset and South Gloucestershire (BNSSG ICB)

The October ICB Board heard that at the end of August (month 5), the BNSSG system reported an actual deficit of £25.3m, £11.4m worse than planned. This represented a £10.1m shortfall among providers and an ICB “adverse variance to plan” of £1.3m. However, with a relatively modest target of £58m efficiencies, the system is maintaining its forecast of break-even at year-end, “both at system and constituent organisation level.” (p2)

There is extra pressure to deliver a balanced budget: the threat that the ICB could be saddled with years of repayments of previous overspending.

“The ICB was established with an accumulated brought-forward debt of £117m derived from net historical clinical commissioning group (CCG) overspends. If the system and ICB achieve breakeven in 2023/24 (having achieved this in 2022/23), the historic debt will be written off. Failure to deliver this breakeven requirement will have the balance reinstated and it will therefore become repayable at c£8.9m per year (0.5% of ICB allocation)” (p3)

But while this penalty for failure and the overall financial problems may seem relatively mild, BNSSG’s performance is still falling way short of targets. The Performance Report as of September 2023 (presented to the October Board) lists a long series of failures and worsening performance, from 4-hour waits in A&E to the total waiting list (BNSSG performance ranked 23rd out of 42 ICBs nationally and 5th out of 7 ICBs in the Southwest).

The situation worsened for the number of BNSSG patients waiting 52 weeks or more, as well as the number waiting over 65 weeks, over 78 weeks, and over 104 weeks.

There were also worse figures for 28 day faster diagnosis standard for BNSSG cancer patients. Only the 2 week wait for cancer patients improved in July, although the 93% national standard “has not been achieved at population level since June 2020.”  (p3)

The Winter Planning Submission is cryptic in presentation. It seems to be proposing a substantial reduction in community beds through the winter, based on a Discharge to Assess (D2A) model.  Asked to supply “ICB level monthly plans for the community beds available,” the response appears to spell out plans for cutting 75 beds (24% of capacity) this month for the coming winter:

“Submission will reflect current [community] bed volumes for Oct-23 (313), then a reduction to 238 from Nov-23 for the remainder of the year, in line with D2A proposals and shift to non-bedded pathways.” (p15/15)

However, the submission does not really discuss finance or staffing to ensure the new system can meet local needs.

 

CIoS is one of the ICBs that annoyingly publish separate papers on each agenda item rather than a single pack per Board meeting that can be searched. They have also avoided giving any explicit financial report on the state of play across the system.

The ICB chief financial officer provided a verbal update to the September Board, stating only that the year-to-date position as at Month 4 showed “a £4.7m deterioration from plan,” but without telling Board members what the actual deficit was, or what the plan was.

It was noted that £2.7m of the deficit is “the direct impact of ongoing industrial action,” and that “clarification is being sought nationally on the funding mechanism for those periods of industrial action which have already taken place.” (p3)

However it seems that the ministers who have been so stubborn in refusing to restore the hefty real terms loss of earnings of medical staff have been less keen to help the trusts foot the bills for extra agency staff and overtime working.

The ICB is unusual in making light of increases in prescribing costs, running at an annual rate of 12%. (p65)

In the most recent Finance report (Month 5) the ICS “adverse variance” has increased to £5.1m, while the efficiency savings are £3.5m short of target levels. Despite the relatively small scale of the deficit, the ICB is still doggedly focused on balancing the books through undisclosed “efficiencies”:

“Delivery of efficiencies, both in total and in recurrent terms, remains the most challenging financial risk we face this year, with potential impact into 2024/25 if recurrent efficiencies fall below plan.” (p8)

While winter/urgent care had shown “some areas of improvement through the summer,” it seems the system is less likely to cope in the winter: “pressures over the last two weeks have highlighted the system fragility and the need for the mobilisation and delivery of robust winter plans and our intermediate care plans.” (p4)

Questions to the Board revealed that CIoS discharged 80% of patients home without support in 2022, much higher than the 50% target set in national guidance for Discharge Pathways. The answers also showed that Cornwall Foundation Trust operates 271 core community beds across Cornwall and the Isles of Scilly, while the ICB commissions a further 15 short-term reablement and rehabilitation beds from the Kenwyn Care Home in Truro. But there are hopes to reduce this provision:

“as the average length of stay reduces in community hospital beds and more people are discharged straight home … and not into a community hospital bed demand for community hospital beds will reduce.” (pages 7-8)

What appears to be a positive Prevention Concordat for Better Mental Health turns out to be too vague to be useful, setting out no costings for the necessary improvements to deliver substantial financial savings which give an added incentive to invest more in preventive measures.

“self harm and suicide prevention has been found to return a total of £12.96 per pound spent in years two to five. In the long term, this increased to £39.11 per pound spent in years six to ten. (p3)

“There are substantial personal and economic costs associated with reduced mental wellbeing, self-harming and dying by suicide. For example, suicides and non-fatal suicidal events, with an estimated average cost of £1.67m (2009 prices) per suicide of working age person.” (p9)

Independent sector

The ICB was reported “on track to deliver the 65 week wait objectives by the end of March 2024,” with the exception of orthopaedics, which were to be “reset,” with a week-by-week trajectory “regional support:”

“Key elements of the reset will be clinical leadership, identifying and embedding new ways of working, extending theatre days and weekend working, further use of choice, and commissioning of additional private provider capacity.” (p4)

The ICB’s Annual Report reveals the extent to which the private sector has also played a role in tackling waiting lists for the simplest ophthalmic services, with all medium and low risk cataract activity transferred away from Royal Cornwall Hospitals NHS Trust “to one of our community providers; Probus Surgical Centre.” The Probus website shows it specialises in a wide range of simpler procedures “including; vasectomy, hands and feet, general surgery and ophthalmology.”

Shifting this work increased the RCHT capacity for “urgent and higher priority care streams,” and resulted in significantly shorter waiting times for cataract surgery compared to national targets.

The ICB has also developed a “cataract choice framework”, which went live in the spring of 2023, and gives patient “greater choice as to where they want to be treated whilst bringing down waiting times even further across the system.” (p58)

An “Independent sector community diagnostic centre” is due to open in Redruth in April 2024 (p22)

 

Devon ICB

 

The ICS is still predicting a (strangely precise) year-end deficit of £42.3m: but by the end of August (Month 4) the actual deficit against plan was already £39.7m.

On the plus side the system’s agency spending was the lowest in the South West region, and efficiency savings were exceeding plan by £11.5m, raising hopes of delivering the full target of £212m. Net risks to limiting the deficit to £42.3m had been reduced from £160m to £106m. (p18)

However the performance on patient care had deteriorated on most fronts. Ambulance handover delays above 15 minutes rose by 33% in August. 4-hour A&E performance and 12-hour waits in A&E both worsened, along with Category 2 ambulance response times. In the hopes of getting better statistics, Urgent and Emergency Care was focusing on 7 Key areas as well as performance on “minors” (Type 3 attenders), as well as “overnight performance, patients that breach between 4-5 hours and virtual ward utilisation.” (p23)

Children & Young People (CYP): Autism Diagnosis was also falling behind, with numbers waiting increased so that “The target cannot be met within current service provision capacity.”

“Waits have been impacted by an increase in number of referrals when schools returned after lockdown with referrals continuing at high levels.”

Another problem is “High levels of children being referred with greater complexity making the assessment process longer. For instance, in Torbay 60% are considered complex when compared to rest of Devon 30% complex.”

Only after running through other explanations for the growing delays in treatment does the report mention the key capacity issue: “60% vacancy rate within CFHD [Children and Family Health Devon].” (p53)

With the ICS target deficit dependent upon the ICB itself underspending by £48.6m (p173), to counterbalance acute trusts delivering end of year deficits totalling over £90m, (p187) which still required “full achievement of efficiency targets of £146m.” (p188)

But by month 5 there was a year to date ICB overspend of £6.9m. This is described as a result of excess spending on private providers – spending which the ICS may not be able to get back: (“payments for Elective Recovery Funding in the independent sector, with an expectation that a future allocation will cover this cost”). (p173)

But if things are hard this  year, they are set to get much harder over the next four years as the ICS budget is scaled back from historically higher spending to its ‘fair share’ of NHS spending per head:

“For 2023/24, Devon ICB is funded above its ‘fair share’ level by £109.5m and the Operational Plan provides for a further £42.4m spend above that amount. Therefore, overall, Devon will this year spend £151.9m above its fair share level.

“This means that each LCP [Local Care Partnership ] area is also funded above its fair share level.”

To remedy this:

“For 2024/25, it is forecast that Devon ICB will be funded at £79.5m above its fair share level and the medium term financial plan currently provides for a further £30m spend above that amount. Devon is therefore planning to spend a total of £109.5m above its ‘fair share’ level in 2024/25. This means that each LCP will also be funded above its ‘fair share’ level next year.

“The current financial settlement is only known to the end of 2024/25, but Devon ICB’s allocated funding will continue to be reduced to bring the ICB to its ‘fair share’ funding target in a process known as ‘convergence’ over the medium term.” (p193)

“The assumed pace of this change is £30m per annum, and so will be achieved within four years.”

As a result, there will be initially a reduction in provider top up funding, “and when that is exhausted a weighted capitation share to each locality. Providers and localities will need to reduce expenditure accordingly.” (p196)

The Winter Planning proposals note that “Based on the initial outputs of the system demand model shows that the Devon system could be in a bed deficit position of -396 beds in January 2024 if no mitigations are put in place.” (p209)

However the ‘mitigations’ that are reported (p210) – even if they are both delivered in full – fall  almost halfway short of plugging the gap, adding up to just 200.9:

“The accelerated rollout of virtual wards is expected to reduce the peak bed deficit from 396 to 305 beds,” [91] and “a number of additional schemes to further mitigate against impact of the winter surge. This additional capacity is made up of both existing and new schemes and aims to reduce the bed deficit by 53.5 beds (109.9 including existing schemes)” (p210)

A “full list of schemes,” is promised in Appendix 1 — which is not included in the document pack. But it seems certain that Devon, “with a very small hospital bed base relative to the population it serves” (p210) is headed for a seriously difficult winter, with too few beds and no real plan to cope.

Use of private sector

Devon is unusual in revealing the extent to which its Urgent and Emergency services and specifically Ambulance response times rely on use of the private sector “Additional frontline resources hours are being funded through the UEC recovery fund. This includes maintaining and increasing private provider capacity…” (p31)

Private providers are also seen as important for elective care: “Additional capacity at independent sector partners continues to be sought through weekly meetings.” (p39)

Perhaps it’s not surprising to see relatively high levels of spending flowing out of the NHS: “Full Year forecast spending on independent sector: £37.5m.” (p183)

 

Dorset ICB

The November Board papers reveal a deterioration in the financial position from a £7.2m deficit at Month 4 to a £20m deficit at Month 6.

The ICB tries unconvincingly to pin the blame for the financial situation on “Operational pressures relating to the Industrial Action,” but undermines this by revealing that  the estimated cost was just “£3.2m to date (£2.8m Month 5) relating to both medical and nursing costs.” (p57)

By contrast “inflationary pressures above the level assumed in national modelling are estimated to have contributed £3.7m to the year to date deficit …  with the biggest movement continuing to be driven by energy prices.” (p62)

Another factor is mentioned without saying how much money is potentially involved:

“There is also a risk around Independent Sector Providers, which saw very high activity growth in 2022/23. It is expected that this growth will continue into 2023/24 based on current activity data. Should the ICB exceed the ERF target of 106% of 19/20 activity levels it is expected that excess activity will be funded. However, should the ISP’s overperform and the ICB in total does not meet or exceed the overall 106% target, this would need to be funded from clawback of under activity from NHS providers. (p62)

The hospital trusts are also in the red:

“University Hospitals Dorset: At the end of September 2023 the Trust has reported a deficit of £17.9 million against a planned deficit of £5.6 million representing an adverse variance of £12.3 million.

Dorset County Hospital is blaming its deficit on a whole host of problems “above plan agency usage …” including” ongoing cover for vacancy and sickness gaps, operational pressures and supporting a 23 expanded bed base contributed in part by sustained numbers of no criteria to reside patients.” Plus “Above planned levels of inflation … with electricity 65% higher than planned levels, with catering supplies, blood product contract increases of up to 13.5% and other contract increases above planned levels.” (p65)

Agency spending across the ICS is expected to hit £53m, compared with a target of just £44m.

The ICB is the only one of 42 in England to single out increased costs of “Personal Health Commissioning (PHC) budgets” as a factor in their deficit, noting “current estimates are that an additional £28.1m will be required in 2023/24, which represents an increase of 26% on last year’s spend.” (p58)

The ICB has an embarrassingly long list of areas in which system performance is falling short of target:

• Virtual ward utilisation.
• Virtual ward capacity.
• Patient waiting beyond 65-weeks for planned care.
• 106% activity, compared to 2019/20.
• Advice and guidance.
• Patient initiative follow-ups.
• Theatre utilisation.
• Day case rates.
• Reduction in follow-up outpatients.
• Cancer faster diagnosis standards.
• 62-day cancer backlog.
• Reduction in patients with no criteria to reside.
• Reducing mental health adult acute out of area placements.
• Increasing the number of adults and older people accessing psychological therapies (NHS Talking Therapies).
• Overall access to core community mental health services for adults and older adults with severe mental illness.
• Children and young people mental health service access.
• Improving access to perinatal mental health services.
• Dementia diagnosis rates. (p68)

There is also a sorry report of under-achievement on the roll-out of virtual ward beds:

“At the end of August, 128 virtual ward beds were operational, although the Integrated Community Care Model includes 60 remote monitoring beds, not counted in the current capacity, which would raise it to 188 beds. However, only 37% [47] of the 128 virtual ward beds were occupied. This is … an underperformance against trajectory by 38.22%, equating to 102 beds fewer than the 230 expected beds.” (p86)

Perhaps it’s no surprise in the light of this that “all planned care standards except for the reduction in the total waiting list, are underperforming against trajectory,” (P71) and “Mental health performance, across all standards, is of concern. Performance against all standards outlined in the operating plan are under the agreed trajectory.” (p75)

A 265-page Plan for Integrated Neighbourhood Teams repeatedly claims possible savings, but nowhere states how much would have to be invested to deliver such results, or where it would come from.

It states, for example:

“There is a substantial opportunity to improve system productivity by investing in community care, which can unlock benefits for local citizens and the broader economy. Our analysis suggests that such a shift could save the typical-sized integrated care system (ICS) around £26 million in reduced acute demand alone, in addition to the vital and wider positive economic footprint that our earlier work has shown healthy populations engender. (p89)

And again: “The reduction in acute demand associated with this higher community spend could fund itself through savings on acute activity … with an average 31 per cent return on investment and average net saving of £26 million for an average-sized ICS, exemplifying the power of community care at a system level.” (93-4)

And at a time of desperate shortages of GPs as their workload expands, the document also argues “The analysis specifically found that the impact of adding one GP for 10,000 people equates to an estimated reduction in cost to be £82,071, relative to need.” (p98)

 

Gloucestershire ICB

As of time of writing (November 2) the only Board papers are from back in September, giving financial figures up to Month 5. These show the ICS with a deficit of £2.8m at the end of July, and warn:

“The ICS continues to face a number of significant financial pressures and there remains a high risk of non-delivery of an overall system breakeven position.

“The financial pressures include:

• ICB prescribing item and price increases.
• Workforce pressures leading to high expenditure on agency and locum staff.
• Medicines division pressures within GHFT.
• Impact of industrial action on operating costs and activity levels.
• Ongoing inflationary pressures – pay and price and demand and growth pressures, including recurrent pressures from 22/23 built into
• the 23/24 plan. There is growing evidence that suggests inflation in specific areas will continue.
• Slippage in the delivery of savings plans.
• A proportion of current pressures are being mitigated through non-recurrent savings, slippage in investments and non recurrent measures.” (p56)

Although the full year target for efficiency savings is relatively light at £57.7m (p80), the ICS financial plan for 23/24 is a breakeven position for the system, and for each organisation:

“this includes a high level of savings and also a number of non recurrent financial savings, efficiencies and income.” (p75)

It still faces a challenge:

“The ICB must show how it planned to break even in 2024/2025 and how a recurrent financial balance could be achieved across that period. The timescale will be challenging, and there was a huge amount of work being undertaken which would come back to the Board and committees across the system in September 2023.” (p11)

Independent sector

“Elective recovery was behind plan as were NHS providers, but the independent sector was on plan. Other pressures included the pay award and children’s placements.” (p11)

Year to date ICB commissioned activity was at 99.6% of the value weighted target –  because under delivery by Gloucestershire Hospitals (92.3%) and out of county NHS providers (82.5%) was offset by Independent Sector providers overperformance (131.6%). (p78)

 

Somerset ICB

Somerset, too  has only published Board papers up to September, and included only minimal financial information or detail on performance. The minutes of the previous Board are cryptic:

“The system submitted a balanced plan for 2023/24 both on an individual organisation and system basis. Against this plan, there is an overspend of £547,000 to the end of May.

[…]

It is anticipated that NHS Somerset will deliver a breakeven position for the end of this financial year.” (p10)

However Somerset seems to be unique among ICSs in spelling out the scale of the local authority’s deficit and including that in the summary of the financial situation: with NHS finances among the very few ICSs to be almost balanced, the local authority (social care) position has created an ICS deficit of £34.5m:

“NHS Somerset is forecasting to deliver a balanced outturn position for the 2023/24 financial year. At month 4, NHS Somerset has a year to date overspend of £3.4m. Somerset ICB’s year-to-date variance predominantly relates to Prescribing costs exceeding plan by £2.0m. Somerset FT’s £1.2m in-year adverse position is driven by additional costs relating to industrial action.” However:

“Somerset Council are projecting a £26.1m overspend at month 4, which is slightly improved from month 3, and largely driven by pressures within Adult Social Care and Children’s Social Care.” (p4)

The limited financial reports for Somerset give no details of any underlying deficits, nor do they discuss the 2023/24 target for efficiency savings.

The impression this creates is of a complacent and relatively well-funded ICB that is happy to let things drift with bi-monthly meetings, and leave the local authority to take the blame for any deficits.