Tackle pressures to give ICSs best chance of success, says NAO

In a new report – Introducing integrated care systems: joining up local services to improve health outcomes – the NAO said there was support for the new system-based structure, but the new model faced significant issues.

‘The new model of integrated health and social care services is being implemented with broad support, but at a time of extreme pressure on both services,’ said Gareth Davies (pictured), the head of the NAO. ‘To maximise the chances of success for these new arrangements, the Department of Health and Social Care (DHSC) and NHS England need to put realistic medium-term objectives in place. They must also tackle pressures on ICSs that require action at a national level, including workforce shortages in health and social care.’

The financial environment is one of the key challenges. NHS England has agreed a core efficiency target of 2.2% with the Treasury for 2022/23. However, the additional withdrawal of Covid funding, and the movement of systems towards target funding, has left ICSs facing an average efficiency requirement of 5% -- with a range of 2.7% to 9.6%.

In addition to the high level of savings needed, on average one-third of planned savings (some £2bn) are non-recurrent – one-off reductions meaning savings have to be re-made the following year. This will further add to pressures next year, with concerns already mounting over levels of inflation and possible pay settlements.

Integrated care boards (ICBs) are responsible for £1.7bn of the total system savings. However, in a submission to NHS England, the boards assessed 36% of their planned savings as high risk, suggesting they may not be deliverable. A further 25% were assessed as medium risk.

NHS England did not ask for assessments of providers savings, which average 3.7% and range from 1.2% to 10.4%.

In addition to this core financial challenge, the NHS is also having to deal with rising vacancy rates – now standing at 9.7%. In 2020/21, the service faced a backlog of repairs and maintenance that would cost more than £9bn to sort out – with £4.5bn of this related to high or significant risks. Providers said there was insufficient capital funding to address it. There are record levels of patients waiting for treatment. And Covid-19 is continuing to constrain productivity.

The NAO said that some elements of the workforce challenge were outside ICSs control. Pay is set by an independent review body. Health Education England controls the number of training places for doctors and nurses. And immigration rules determine the roles and salary levels for international recruitment. Work from Health Education England and NHS England (see recommendations) should be published to support ICSs at a local level, the financial watchdog said.

The NAO report also said that work was needed to enable systems to address the wider determinants of health and to focus on prevention. Although ICSs had been asked to take a long-term approach focused on preventing ill health, scrutiny from NHS England was centred on elective recovery and the financial position. And in a survey of ICS staff, fewer than one in three felt their system had the capacity to invest in prevention.

According to NHS Providers’ interim chief executive, Saffron Cordery (pictured), the report highlighted how it would be tough for systems to deliver stretching efficiency savings. ‘Systems face significant operational challenges including workforce shortages, increased activity to tackle backlogs and ongoing Covid-19 pressures, all of which are creating major cost pressures,’ she said. ‘The government can back this joined-up working by helping to boost staff recruitment and retention with a long-term, fully funded, national workforce plan.’

Sarah Walter, director of the NHS Confederation’s ICS network, said the introduction of ICSs presented a unique opportunity to plan and deliver patient care differently across the NHS and social care. ‘But change will not happen overnight and local systems need the time, space and support to deliver on their ambitions,’ she said. ‘That means government action to address the fundamental challenges of constrained funding, huge staff shortages, lack of capital investment and commitment to tackle health inequalities.’

She added that there was growing concern among ICS leaders about the ‘government’s lack of attention and coherence across its departments on actions to tackle the wider determinants of ill-health’. She cited, as examples, the pausing of planned obesity and mental health strategies, the ‘apparent disappearance’ of the white paper on health disparities, and the rowing back on net-zero targets.

NAO recommendations

• Government to establish transparent arrangements across all departments to tackle drivers of poor health outcomes, including education, benefits and transport.
• DHSC to publish by December the Health Education England-led assessment of strategic drivers for health and care workforce, and the long-term NHS England plan for growing and retaining workforce.
• NHS England should set out plans to identify unavoidable cost differences in the provision of healthcare by different trusts and take account of them in allocation formula.
• NHS England should align its oversight of ICBs with the strategic objectives for ICSs.
• NHS England should evaluate lessons from simplified commissioning and contracting system during Covid and streamline information requests to frontline providers