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ICBs must cut agency spend, NHSE says

ICBs must cut agency spend, NHSE says

By Jess Hacker
4 January 2023

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Integrated care boards (ICBs) must set plans in motion to reduce agency spending under a suite of new efficiency savings targets published by NHS England.

In its 2023/24 operational planning guidance, the NHS in England set out a target to reduce agency spending across the NHS by to 3.7% of the total pay bill for the year.

It said that ICBs should work with providers to develop ‘robust plans’ that deliver on the target among other efficiency savings, and to help raise productivity.

NHS England also instructed ICBs to plan to make efficiency savings by:

  • Reducing corporate costs, with particular focus on automation to deliver services at scale
  • Reducing procurement and supply chain costs
  • Purchasing medicines at ‘the most effective price point’ to ‘get the best value from the NHS medicines bill’.

The health service also charged systems with identifying where productivity has been lost, including by deploying staff more flexibly  and reviewing workforce growth by staff group.

It comes after NHS England’s December board papers revealed that ICSs have overspent by £651m in the first six months of the financial year against the NHS England revenue.

The new operational guidance also set out a number of key priorities across the NHS, however it set out fewer than in previous years in line with the Government’s broader ambition to reduce national targets.

NHS England stated it intended to make it ‘easier for people to contact a GP practice’ by ensuring appointments are offered within two weeks.

It also stated its intention to recover elective care services by meeting the 85% day case and 85% theatre utilisation expectations, with NHS England set to agree elective targets with systems on the basis that Covid-19 demand will be similar to the last 12 months.

Systems were also asked to refresh their 2022/23 whole-system workforce plans to improve staff experience and retention through a ‘systematic focus on all elements’ of the NHS People Promise.

It also confirmed the long-term workforce plan would be published in the spring.

But the targets set out in the guidance are undermined by a failure to reach an agreement over industrial action, health leaders have said.

Matthew Taylor, chief executive of the NHS Confederation, said: ‘As ever, NHS leaders will do all they can to meet these targets, but the big ‘known unknown’ is how disruptive industrial action will be. Failure to bring a speedy end to the dispute will inevitably halt the progress the NHS can make in recovering services.

‘What will help NHS leaders though is the commitment from NHS England to reduce the number of national targets outlined in the planning guidance and to create more funding flexibility and space for local leaders to develop tailored priorities for their communities.’

And Saffron Cordery, interim chief executive of NHS Providers, said: ‘It is unclear whether systems will be provided with additional funding if next year’s pay settlement exceeds what has been budgeted.

‘We must not see a repeat of this year, in which NHS England and trusts were forced to deprioritise investment in care improvements following the government’s failure to fully fund the pay award. If the NHS is again forced to scale back transformational investment, this will limit the capacity for efficiencies, and will ultimately affect patient care.’

In November, Chancellor Jeremy Hunt appointed former Labour health secretary Patricia Hewitt to help ensure the efficiency and accountability of all 42 ICSs.

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