ICS sets balanced budget to avoid NHS England sanctions

At the end of March, NHS organisations in South Yorkshire submitted a combined deficit plan of £110m for 2023-24. But this has reduced to a breakeven plan in their latest submission.

It follows a month of pressure from NHS England on systems across the country after they warned of a £3bn spending gap.

At the meeting of the integrated care board, held last week ahead of the plan submission, the board was told further savings and extra funding from NHSE had brought the projected overspend to £23m, and members discussed whether to submit a balanced plan.

Chief finance officer Lee Outhwaite said: “There’s a conversation taking place about is it credible for us to submit a breakeven plan, noting all of those risks, or is it more credible to hold out and go? It’s highly likely we’re going to have a deficit position as a system.

“To a large extent that conversation is more about the tactics of how we engage with NHSE than the calculus of where we’re likely to finish up…

“If I was kind, I would say we’ve had an iterative conversation with NHSE colleagues. If I was being slightly less kind, I’d say we’ve had a slightly attritional conversation with NHSE colleagues, about ‘what are you going to do to make that number better’.

“Because there is a strong sentiment, and it’s largely true, that if we’ve got a deficit plan in South Yorkshire, somebody’s got to bail it out with spending another part of the country’s money, which NHSE understandably don’t like.”

Chair Pearse Butler said: “Clearly this looks really risky and stretching. Crudely, if we declare a £23m deficit, we get a degree of freedom limitation on us. If we declare balance but with the risk of £23m we might have a bit more freedom to act. We’re trying to work through, tactically – my words – the best way to do it.”

Following the meeting, the ICB confirmed it submitted a balanced plan to NHSE.

CEO Gavin Boyle said the ICB and providers were keen to avoid the extra controls and regulatory oversight that came with submitting a deficit plan and said: “To be frank, it doesn’t change the position, it just makes it more difficult to deal with it…

“Basically a regulatory control regime is being described whereby those systems that are not seen to be delivering their financial responsibilities adequately become subject to, and that means there could be restrictions on capital, and indeed significant revenue spend. What we’re really keen to do is avoid being in that number.”

During the meeting, Mr Outhwaite said delivering a balanced plan would require savings of nearly £300m, which the ICB later clarified equated to a savings rate of 8.1 per cent.

The system’s finance lead said the gap was driven by double digit inflation that was unprecedented in his career and the use of one-off funding to plug gaps last year that could not be repeated.

A spokesman for NHS South Yorkshire said: “At our public board meeting we have full and frank discussions about key challenges and priorities for health services in our area, including our financial plan for 2023-24.

“The board of the ICB approved the financial submission and are fully committed to its delivery and will continue working with our healthcare partners and local communities to do this.”

NHSE was approached for comment.