Integrated care board cuts – what does it all mean?

The bombshell news of the merger/reorganisation/abolition of NHS England has largely overshadowed a potentially equally seismic shift in the set-up of the health system – a complete overhaul of the function and purpose of integrated care boards (ICBs) accompanied by swingeing cuts to their operating costs of 50% by October this year.

On the one hand, you could ask – so what? This is obviously a huge deal for staff involved, who will face losing their jobs. But for staff working directly with patients and patients themselves experiencing the day-to-day NHS challenges, it could almost feel like reorganising deckchairs on the Titanic – except half of those deckchairs are being taken away, so perhaps it is more apt to say it feels a bit like playing musical chairs on the Titanic. On the other, it does signal a significant change in direction, and may at least in the short term have a deleterious impact on the day-to-day running of services locally – not least because currently ICBs commission nearly all of the hospital and community NHS services locally.

We still don’t have lots of detail on what this all might look like, but here is what we do know.

ICBs have been asked to make 50% cuts to ‘running costs’. The exact detail of what and how has not yet been set out, but this will likely cover quite a wide cost base, including the money set aside for day-to-day management and admin costs (the running cost allowance), as well as some wider programme costs.

Where exactly should these costs fall? On his first day in office, the incoming transitional Chief Executive of NHS England, Jim Mackey, wrote to ICB, trust and regional leaders setting out a high level overview of direction of travel, stating that the role of ICBs will primarily have a role in the future as strategic commissioners – and indicating a fundamental rebalancing of responsibilities between providers, ICBs, and NHS England regional teams.

ICBs will need to retain commissioning staff and core finance/contracting functions. But they are being asked to think about cuts to assurance and regulator functions (which, for example ensure effective arrangements are in place for information sharing on safeguarding), wider performance management (such as assessing providers’ financial management) and engagement with local partners, especially where staff in trusts or at regional level are already performing these functions. Currently ICBs have a range of statutory duties regarding these areas, although expected new legislation in the coming months or years may change this.

I’ve asked some of my expert colleagues to give their views on what, and how much, will be impacted by these cuts and change in direction.

‘Previous experience shows that a focus on cutting costs makes collaboration – key to strategic commissioning – harder’

Lillie Wenzel

It appears that ICBs’ role as commissioners will be the main constant as they work to deliver the significant cuts required of them – although what exactly this role looks like is expected to change.

ICBs commission the vast majority of NHS care and the range of services they are responsible for has steadily increased since they were established in 2022, with the transfer of responsibility for some commissioning of specialised services (such as renal transplantation, one of approximately 150 specialised services , worth around £20 billion in total) from NHS England still in progress as the cuts were announced.

In recent months the government has signalled its intention for ICBs to shift towards becoming ‘strategic commissioners’, taking a lead role in transforming care and developing a neighbourhood health service that meets the needs of its specific population.

While this core objective is clear, and the commissioning function appears to have been protected from direct cuts, what exactly this will look like, or what it will mean for the commissioning of specific services is less certain. Mackey has indicated, for example, that the appropriate level for specialised commissioning will need be reconsidered in the coming months. And how ICBs will fulfil their role as strategic commissioners in the context of cuts is another question.

More broadly, it is hard to believe that the requirement to deliver significant savings will make ICBs’ transition to focusing solely on strategic commissioning easier. Previous experience shows that a focus on cutting costs stretches ICB leadership and makes collaboration – key to strategic commissioning – harder, highlighting the real risk that the cuts hinder progress towards this goal.

‘This has to become a reset moment where we return to the original purpose of integrated care systems’

Chris Naylor

Faced with cuts on this scale, the worst possible response would be for ICBs to try to keep doing the same things but with fewer resources. This has to become a reset moment where we return to the original purpose of integrated care systems (ICSs) and critically examine where things might have gone off track.

ICSs were developed first and foremost to bring about a shift towards greater integration and partnership working between NHS organisations, local authorities, voluntary sector organisations and others – so that patients could experience more joined up care when and where they need it.

Our research has found some signs of this shift taking place but against an extremely difficult backdrop that has all too often led to ICBs and their partners retreating to the fragmentation and ‘organisation-first’ behaviours that are so familiar from the past three decades.

The ICBs that emerge on the other side of this overhaul need to be tightly focused on that original goal. Their role is to ensure local organisations work together to bring about new models of care that overcome the divides between primary care, hospital care, community services, social care, mental health services and other parts of the system. Co-ordination of services is much better for people using them – particularly for people needing to access multiple services as is increasingly likely due to increasing rates of people with multiple or complex long- term conditions – although whether ICBs have so far managed to achieve this is a different question.

ICBs need to be able to use resources differently to bring about government’s vision of a more preventative, community-focused approach to health. And they need to be able to challenge the entrenched behaviours and interests that stop this from happening.

The challenge is to ensure that the ambition of partnership and system working is strengthened by the current changes rather than fatally undermined by them.

‘The separation of performance management and strategic commissioning is a good thing’

Alex Baylis

The separation of performance management (now to be done by regional offices) and strategic commissioning (now the main focus of ICBs) is a good thing. It’s clear that the Janus-like role of ICBs, in which they supported local system development and at the same time were taskmasters for national priorities, was not working. The immediate priorities of access and finance always crowded out long-term development.

This change, together with reduction in size, means ICBs need to develop new system leadership roles, and drop other ones. For example, Jim Mackey has singled out growing numbers of nurses in non-patient-facing roles. Anecdotally, there are examples of great work that nurses working at system level do, such as leading aspects of quality of patient care or efforts to improve staff retention – but that is not ICBs’ role now.

From now on, ICBs will need to focus pretty much exclusively on the long-term agenda of the three shifts and the commissioning approaches and support for system working needed to achieve them. Previous work by ICBs, focused on assurance and improvement in providers, will need to be taken forward by providers themselves.

How this will fit with regions’ roles in performance management, how it fits with pushing quality of care up the agenda (a very welcome aim from Mackey), and whether half-size ICBs will have enough capacity to do it, remain to be seen.

‘Cuts to ICBs will mean they have less power and funding to meet ambitions like shifting care into the community and reducing health inequalities’

Danielle Jefferies

ICBs have to negotiate budgets across a variety of organisations working within their systems, some of which will be grappling with very tight budgets, like many acute trusts and local authorities. This would be difficult to manage at the best of times, but cuts to ICB funding will mean there’s less wiggle room in central ICB budgets to make ends meet. And the seemingly diminishing role of ICBs may mean they have less authority to make tough financial decisions, especially when there are bigger players in the game (eg, big specialist and teaching hospitals).

With the help of last-minute funding injections, most ICBs have managed to balance their budgets for the 2024/25 financial year. However, there is still a large amount of variation, with some ICBs still not meeting their 2025/26 financial targets. It’s currently unclear how the 50% cuts will be implemented, but if it’s implemented uniformly across organisations, the ICBs already struggling will be hit much harder.

Beyond balancing budgets, ICBs also play a key role in transformation by allocating and reallocating funding across systems. It’s widely agreed that to meet ambitions like shifting care into the community and reducing health inequalities, funding allocations need to change. But cuts to ICBs will mean they have less power and funding to make those changes.

A potential silver lining is that organisations that currently sit across multiple ICBs (eg, ambulance trusts) may find it easier to negotiate their funding if there are fewer ICBs because of mergers.

‘ICB consolidation will happen alongside local government reorganisation – any changes to NHS geography should be synergistic with these wider changes’

Luca Tiratelli

It’s being reported that the cuts to ICBs are going to drive a ‘big consolidation’ of ICBs. If this is going to happen, it’s important to remember that the NHS doesn’t exist in a vacuum. Other parts of the public sector have their own geographies, and they too are being reimagined by this government.

The proposals in the recent devolution White Paper will change the landscape of combined (soon to be rebadged ‘strategic’) authorities around the country, and also change the makeup of areas with two-tier local government arrangements. Any mergers of ICSs or changes other changes to NHS geography should be done in a way that works with these wider changes, and grasps the opportunity that is here to make an overarching and coherent package of reforms.

We know from work we’re currently doing on devolution that the relationship between ICSs, local government and combined authorities is massively important to the efficacy of work on the wider determinants of health – and areas that are coterminous between these organisations tend to have a bit of a leg up.

In areas where things are working well and relationships are well established, I would hope reorganisation should try not to upset any apple carts, and in areas where there’s scope to improve, I hope redrawing the map helps rather than hinders this process. In practice this probably means allowing bespoke arrangements to develop in different regions.

‘ICB digital leadership is important in a fragmented digital system – whether sufficient capacity remains in ICBs to achieve this remains to be seen’

Pritesh Mistry

At the same time that the NHS is undergoing significant changes in structure the technology landscape is also shifting rapidly. These changes are likely to have an impact on how the health care system moves to implementing more digital and data tools and capabilities, which is one of the government’s priorities.

ICB digital leadership is particularly important for improving interoperability – ensuring different systems talk to each other – In a very fragmented digital system. It is also important for aligning provider digital strategies, facilitating digital skills training for staff and supporting the implementation of key technologies such as the Federated Data Platform and finally supporting population health management. The NHS has long struggled with scaling technologies and again ICBs could help, but that will become more difficult if they’re having to make significant cuts.

It is currently unclear where the responsibility of digital co-ordination across providers and services will sit. None of this has to be the responsibility of ICBs but it does need to be over a larger area than a single provider, and to be manageable should be smaller than a region.

If ICBs are to take this function forwards, they will need to have a specified focus. ICB digital leadership will be effective if technology budgets are protected and digital implementation prioritised, otherwise funding will be used for other priorities and transformation will be slow or absent altogether. It is vital that leaders grow the digital and data knowledge and skills within ICBs to achieve transformation, but these staff also command competitive salaries across sectors not just in health and care.

The radical change needed to shift from analogue to digital needs co-ordinated system approaches to digital leadership to overcome fragmented tools and wrap care around the patient – whether sufficient capacity remains within ICBs remains to be seen.

Conclusion

There are currently major changes afoot to the structures and functions of the NHS at all levels – from providers, to ICBs, to regions, to the very top – with particularly existential impacts on ICBs. But ultimately, what matters is what these changes will mean for the way patients experience services. As restructures and reshuffles and reorganisations take place, all eyes should be on what really matters – can beleaguered services work continue to work together through it all to meet local needs and deliver better care in the long run?