The ICB running cost envelope is to be reduced to £18.76 per head, according to an NHS England draft blueprint of the future model of ICBs.
The chief executive of NHS England, Sir James Mackey, revealed last month that the variation in spend per ICB per head currently ranges from £49 to just less than £21 per head.
The blueprint, initially published by HSJ, was developed with a group of ICB leaders from across the country to provide a ‘consistent understanding of the future role and functions of ICBs’.
NHS England confirmed to Healthcare Leader the document had been shared across the ICBs, but said it is a draft and will be updated based on feedback.
The document set out the running cost envelope for ICBs and that it must be delivered by the end of Q3 in 2025/26 and recurrently into 2026/27.
The £18.76 per head figure will include all ICB running costs and programme pay, but exclude pharmacy, ophthalmic and dental (POD) services and specialised commissioning delegation.
Plans on how ICBs are to meet this new running cost target are to be submitted to regional leads by 5pm on 30 May 2025.
The blueprint added that ICBs were encouraged to expedite the changes, as any in-year savings can be used on a non-recurrent basis to address in-year transition pressures.
It said: ‘There will be flexibility at an ICB-level, as some inter-ICB variation may be warranted and will need to be managed within a region to account for hosted services, however we expect delivery of the target at an aggregate regional level.’
It added: ‘Generating savings cannot be a cost shift to a provider unless overall there is the saving.’
However, it recognised that not all the outlined changes to the form of ICBs can be made this year and that some will require legislation changes.
‘Recognising this, we anticipate that most savings will come from streamlining approaches, identifying efficiency opportunities – through benchmarking, AI and other technological opportunities and from at scale opportunities afforded through greater collaboration, clustering and where appropriate, eventual merger of ICBs,’ it said.
‘Principles to apply to footprints, clustering and mergers will be communicated and coordinated by regional teams.’
Functions of an ICB
The document also included the functions that will be retained, expanded and transferred from ICBs in the coming months.
Those that will be retained include quality management, board governance, clinical governance, core operations such as HR and communications, and existing commissioning functions including clinical policy and effectiveness.
Those that will be expanded include population health management, strategic planning, health inequalities, commissioning neighbourhood health and commissioning end to end pathways, including those delegated by NHS England such as general practice.
However, those that will be transferred away from ICBs to neighbourhood health providers will include primary care operations and transformation, including primary care, medicines management, estates and workforce support, as well as the development of neighbourhood and place-based partnerships.
Continuing healthcare, general practice IT, estates and infrastructure strategy, safeguarding and SEND will also be transferred out of ICB responsibilities.
Supporting staff
The document also said a national support offer would be available to ensure the fair and supportive treatment of staff who are affected by the transition.
This includes advice on voluntary redundancy and mutually agreed resignation schemes, advice on redeployment and retention.
‘Funding mechanisms to support these options will be clarified centrally ensuring local systems can manage workforce changes consistently,’ it added.
‘Emphasis will be placed on transparent, compassionate communication and engagement to retain talent and maintain morale through the change process. We will work in partnership with trade union colleagues to implement the change for staff.’
It comes after health leaders called for a national staff redundancy fund to help with the budget cuts ICBs must make this year.
ICBs were told in March they must cut their running costs by around 50% by October 2025 and to focus on reducing duplication when making cuts.
However, health minister Karin Smyth recently revealed that there had not been an impact assessment conducted of the NHS decision to reduce ICB running costs.
In a written answer to a parliamentary question from liberal democrat MP Helen Morgan, on if the department had looked at this, health minister Karin Smyth said: ‘The Department has not conducted an impact assessment of the NHS decision to reduce ICB running costs.
‘NHS England will be working closely with ICBs to support the development of these plans, ensuring that their implementation reduces duplication and supports patient care.’
On the blueprint, Glen Burley, financial reset director and accountability director at NHS England, said: ‘The new draft Model ICB Blueprint marks the first step in a joint programme of work to reshape the focus, role and functions of ICBs and is linked to the work we’re also undertaking to reshape regions, the centre and our broader approach to the operating model.
‘There is still much more work to do but we are sharing the blueprint to help ICBs design their future state and develop their plans to achieve the 50% reduction in running costs.
‘We are seeking to reduce the management costs of the NHS so that more money can be spent on the frontline. This won’t be achieved by simply moving functions to different organisations – instead ICBs need to be working together to merge functions to cut duplication as part of their plans to make significant cost savings.’
