Are Sajid Javid and Rishi Sunak setting up the 42 new NHS Integrated Care Boards to fail?
- There is a need to manage public expectations about what the new statutory body responsible for purchasing and providing NHS treatments in West Yorkshire can achieve.
- This is because of a multi-million pound funding shortfall for 2022/23, that will extend into 2023/24 and require high levels of “efficiency cuts” of around 4-5% this year.
- The Board will need to consider how the quality of West Yorkshire NHS services is affected by these cuts.
This was the message from the first meeting in shadow form of the new West Yorkshire Integrated Care Board. (The Board will fully assume its powers on 1 July 2022, as mandated by the contentious Health and Care Act 2022 that received Royal Assent at the end of April.)
Such a high level of NHS efficiency cuts has never before been attainable. Average efficiency improvements by NHS trusts in the decade to 2016-17 were around 0.9%, according to NHS Improvement. Slightly stretching this historical rate, the headline efficiency “ask” for the 2019-24 NHS Long Term Plan funding settlement was a 1.1% recurrent reduction in costs each year – essentially requiring the NHS to absorb the first 1.1% of inflation through “cost improvement plans”.
The Board heard from its Finance Officer Designate, Jonathan Webb, that the 2022/23 operational plan sent to NHS England/Improvement showed a £73m funding shortfall for West Yorkshire NHS.
The West Yorkshire Integrated Care Board are now waiting for NHS England/ Improvement’s response to their “deficit plan” for 2022/23.
The quango’s guidance is that all Integrated Care Boards should meet their financial targets and break even.
Update 28 June 2022: Additional financial allocations of £1.5bn have been made available to Integrated Care Systems across England to allow for the impact of inflationary on costs incurred by the NHS in 2022/23. On this basis, the Integrated Care Board are expecting that the financial plan deficit of £73m will be closed, and that they will have a break-even financial plan across West Yorkshire. This removal of the planned deficit does not seem to have reduced the required 4-5% “efficiency savings” (spending cuts”), according to the West Yorkshire Integrated Care System’s response to a written question to the May shadow Integrated Care Board meeting.
Work on activity, workforce and finance plans to “close funding gap”
According to the Health Service Journal, the West Yorkshire NHS Integrated Care Board’s £73m “deficit” is down from the £121m funding shortfall identified in an initial version of the Board’s Operational Plan.
The Board heard that work has been carried out to “firm up … activity, workforce and finance plans to close this gap”.
The Integrated Care Board is focussing on “efficiency, productivity and waste reduction” as key to meeting this “financial challenge” and is carrying out “deep dive reviews with collaboratives”.
Work on financial sustainability is being carried out at “place” (local authority) level, where subcommittees of the Integrated Care Board are delegated to carry out its functions. These subcommittees include Calderdale Cares Partnership and Kirklees Health and Wellbeing Partnership.
We have no idea if these place subcommittees meet in public or publish their papers and minutes
So we can’t track and report their work – unlike with their predecessors the Clinical Commissioning Groups, whose Governing Bodies met in public and were open to public questions and statements.
Update 28.6.2022 Calderdale Clinical Commissioning Group has told us that the Calderdale Integrated Care Board subcommittee, known as Calderdale Cares Partnership Board, will meet every two months in public, and every other two months in private. For its meetings in public, Calderdale Cares Partnership Board agendas, papers and minutes will be available on the West Yorkshire Integrated Care Board website. Members of the public will have the opportunity to submit questions prior to the meeting on the papers being considered at that meeting. Details will be published on the West Yorkshire Integrated Care Board website after 1 July 2022.
The breakdown of the Integrated Care Board’s funding shortfall by its key member organisations wasn’t mentioned in the Board meeting
Update 28.6.22 In response to a question asking which West Yorkshire NHS organisations were the main source of financial risk, the Integrated Care System told us,
“There were specific issues in the ambulance sector nationally that to an extent have now been addressed by additional funding from NHS England & Improvement to ICSs. Otherwise the main financial risks were apparent within the acute hospital sector.”
The Lowdown recently reported :
- Wakefield Clinical Commissioning Group admits that the numbers waiting for treatment at Mid Yorkshire Hospitals Trust, at close to 40,000, exceed NHS capacity and has led to increased use of private providers (More info here about Mid Yorks eye patients’ referrals to private providers and risk of preventable sight loss.)
- Leeds Clinical Commissioning Group reports: “Other places across WY are indicating more material deficits. Leeds’ risk of £15m is in the context of an overall larger gap across the WY ICS at this early stage of planning. Work is ongoing with the intention to close this gap and submit a balanced ICS position for the national deadline.”
- Bradford & Craven Clinical Commissioning Group March papers project an underlying Clinical Commissioning Group deficit of £21.6m being taken into 2022-23 (p53) along with local trusts £23.8m bringing the total ‘place’ deficit to £45.4m (p55).
- Calderdale & Huddersfield Foundation Trust May 5 papers, in minutes from March 3 meeting, warn of “£43m challenge for 2022/23 of which £20m is an efficiency challenge (CIP), leaving a £23m deficit.” (p15)
The Board heard that reasons for the West Yorkshire Integrated Care Board funding shortfall include NHS England’s failure, in setting its harsh financial allocations for 2022/23, to take account of:
- Price inflation
- Reductions in Covid-19 financial support which are not matched by a fall in Covid-19 costs, given failures of infection prevention and control
- The existence of an underlying deficit as an Integrated Care System that will require work into 2023/24 and presents a financial challenge
“If people can manage their own pain they don’t mind waiting.”
Board member Hilary Thompson (Independent Member of Kirklees Health and Wellbeing Partnership, and Senior Responsible Officer for Harnessing the Power of Communities at West Yorkshire and Harrogate Health and Care Partnership aka Integrated Care System ) said that the public has high expectations of the new Integrated Care Board. But its financial restraints and workforce issues mean there is a need to manage public expectation of what the new Integrated Care Board can achieve.
Anthony Kealey (West Yorkshire Director of NHS England/Improvement)agreed they “need to be realistic with the public about what to expect.”
Board member Fatima Shah, Programme Director of Unpaid Carers and Personalised Care in West Yorkshire Integrated Care System, said she supported Hilary Thompson’s point but asked if the Integrated Care Board was using personalisation enough because “if people can manage their own pain they don’t mind waiting” for treatment.
The Chair Cathy Elliott, asked,
“How can IC Board members get out on ground and see what’s happening?”
What will be the quality impact of efficiency cuts?
Board member Jane Madeley, Chief Financial Officer at The University of Leeds, asked,
“How does the Board get assurance that the quality impact of efficiency plans has been properly considered?”
Anthony Kealey said he will bring back a review of the quality impact of efficiency plans to the Board later in the year.
The Integrated Care Board Chief Executive designate, Rob Webster, said
“We need to make sure we’re rock solid on this because the risk is significant.”
Jonathan Webb reminded the Board that the figures in the report today are a work in progress – not the final set of financial plans for the Integrated Care Board this year.
Update 19 May 2022 – NHS England allocates extra dosh for inflation and other pressures, but not enough to cover ICS funding shortfalls.
The Health Service Journal reports that on 17th May, NHS England announced an extra £1.5bn allocation (taken from elsewhere in the quango’s 2022/23 budget) to help cover some of the inflationary costs faced by NHS Integrated Care Boards:
- Around £700m for providers of NHS services, including private companies, to cover rising energy and other costs, to be paid through increased tariff and contract payments.
- Another £150m for ambulance trusts, where response times have crashed over the past six months.
- Around £750m to help cover a range of other costs pressures, including care market costs, and some specific regional issues.
The extra money is not enough to make up for Integrated Care Boards funding shortfalls and the Boards have to submit new financial plans by the middle of June telling NHS England how they will use the new cash and and how they will make “savings” to close remaining gaps.
NHS staff to take the pain from NHS England’s upcoming national pay “savings initiatives” and restrictions on Hospitals’ use of agency and bank staff
The Health Service Journal says that as well as a range of national pay and non-pay “savings initiatives” over the summer, to be imposed by NHS England over the summer, hospital trusts will also be asked to reapply restrictions on the use of agency and bank staff which had been eased during the pandemic and during the initial stages of the elective recovery programme.
How is the elective recovery programme to succeed without the staff to carry it out?
NHS frontline staff are already leaving in droves – burnt out through lack of care for their own health and wellbeing and moral injury – the distress that arises in response to actions or inactions that violate our moral code, our set of individual beliefs about what is right or wrong. Pay cuts and extra workload are not going to improve staff retention.
And – as Anthony Kealey told the shadow West Yorkshire Integrated Care Board – if the West Yorkshire NHS doesn’t meet NHS England’s target for elective recovery, they will be fined (through a funding reduction), so their financial position will worsen even further.