Health systems making progress on NHS reforms but urgently need clarity over redundancy funding

Health systems are already making significant progress implementing the government’s NHS reforms but urgently need clarity over funding for redundancies to continue moving forward, a new report has found.

The NHS Confederation’s latest annual State of Integrated Care Systems (ICS) report shows that system leaders fully support the government’s Ten-Year Health Plan with more than half already making progress on the three key shifts. 

The report is based on a survey of senior integrated care board (ICB) chief executives and chairs and integrated care partnership (ICP) chairs (collectively ICS leaders) and reveals strong support for the government’s reform agenda but highlights growing concern that NHS reorganisation and cost reduction demands are creating significant barriers to delivery.

The survey found that more than three-in-five (64 per cent) felt shifting health spending into the community by 2035 will make the most difference to their local communities. 

Meanwhile, 36 per cent said that developing integrated health organisations (IHOs) holding outcomes-based contracts will make a big difference to their local communities.

But the report also shows that ICB leaders are concerned that ICB redundancies and NHS reorganisation have created a significant distraction and barrier to systems’ progress. The government has tasked ICBs with reducing their running costs by 50%, which will require significant redundancies at an estimated cost of £1 billion.

Some 95 percent of ICB respondents said they were very or fairly concerned about the impact of the required cost reductions on their ability to deliver against national and system priorities. Until this issue is resolved, ICBs are in limbo - unable to release the necessary savings, provide certainty to staff and effectively plan for the future.

One ICB chair said that “all attention has been on the process of reorganisation itself”, which has impacted their ability to focus on the government’s three shifts – analogue to digital, hospital to community, sickness to prevention.

ICS leaders want the Department of Health and Social Care (DHSC) and NHS England to urgently clarify funding and timelines for NHS restructuring, warning that delays and uncertainty are threatening progress on the government’s 10 Year Health Plan.

This builds upon a recent call from the NHS Confederation and NHS Providers for the government to use the upcoming Budget to provide funding to cover these redundancies and other cost pressures or the health service may have to cut staff or services.

The report also highlights that while ICBs are committed to their role as strategic commissioners, leaders say further support is needed to develop the skills and tools needed to fulfil their strategic commissioning role. This is especially related to how they can work more flexibly and innovatively with providers, shape the provider market, and understand the impact of services over a longer term so they can ensure they provide the best possible outcomes for local populations.

They are also concerned about the future of statutory responsibilities, such as all age continuing care (AACC), safeguarding and medicines optimisation, which will remain with ICBs despite the shift in focus to strategic commissioning. ICB leaders are looking at how these can be delivered at this lower cost, but are concerned that they could potentially be subject to judicial review if they fail to meet statutory responsibilities they have not been resourced to deliver.

Further findings include that around a quarter of ICS leaders plan to retain ICPs in non-statutory form and around two in five will integrate their functions into health and wellbeing boards. 

The report makes a series of recommendations to both the DHSC and NHS England, including:

• Provide clear and regular communication to ICB leaders about the change programme, including support for systems making further staffing or service cuts, clustering or merging.
• Support and resource the development of ICBs’ strategic commissioning skills and capabilities.
• Appoint a senior commissioning lead in the future DHSC structure to support ICBs.
• Model cross-government collaboration to promote integration between the NHS, local government and wider partners by aligning policy, guidance, legislation and the health and economic growth missions.
• Embed a more devolved operating model, giving ICBs the autonomy to make difficult commissioning decisions and co-produce the tools they need.

Sarah Walter, director of the NHS Confederation’s ICS Network, said:

“ICS leaders are fully committed to implementing the government’s Ten-Year Health Plan and making the key shifts it sets out. This report in fact shows that many are making significant progress despite the difficult financial and operational pressures they are under.

“But they need further clarity, support and the right tools to do so. Without urgent action to resolve funding for redundancies and provide strategic commissioning support, the NHS risks entering the next phase of reform on unstable footing. 

“The government must act now to ensure systems can move forward with confidence and deliver the transformation patients need and deserve.”

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