ICSs have overspent by £651m in the first six months of the financial year against the NHS England revenue, board papers have shown.
The data suggests that this has contributed to an overspend of £482m (0.6%) across the NHS system.
In its December board meeting, NHS England chiefs heard that the overspend in ICSs was largely caused by operational pressures, notably higher levels of Covid and sickness absence.
Systems told NHS England that they forecast these overspends will be recovered in the second half of the year, bringing spend in line with the initial plan.
But systems will still need to deliver £5bn in efficiency reductions to deliver the plan.
The revenue plan for the year accounted for an overspend of £100m, driven by five systems failing to submit balanced plans. This followed a further £1.5bn inflation funding issued to systems.
According to NHS England, the health service has had to identify this within its overall budget, alongside funding to cover the additional 2022/23 pay ward costs.
It said: ‘This has meant slower increases than initially planned to investment in technology and diagnostics capacity. On top of this, systems will still need to deliver £5bn of efficiencies (including reductions to covid spend) compared to 2021/22 in order to deliver the plan. This is in the context of more covid patients in hospital than in the last two years.’
The overall forecast expenditure for the NHS stands at £155.4bn: £170m above plan, marking an overspend of £270m.
It said that there is a significant risk in ‘particular system positions’ but that it expects to recover this position and breakeven by the end of the year.
NHS England also said it expects to see a £90m underspend brought about through reduced expenditure on central budgets, via vacancies and ‘bearing down on non-staff costs’.
But there are still a number of uncertainties – notably the impact of Covid-19 and convergent winter pressures on services and the impact of additional inflation costs – which pose risks to the NHS.
