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ICBs must cut staffing costs cut by 30%

ICBs must cut staffing costs cut by 30%
By Jess Hacker
6 March 2023

ICBs must cut their running costs by 30% by 2025/26, NHS England has said.

In a letter sent to ICB chief execs, NHS England said it would cut each ICB’s running cost allowance (RCA) – which includes an ICB’s staffing budget – by 30% in real terms, with at least 20% to be delivered in 2024/25.

There will also be no increase to the RCA to account for inflation, it said.

NHS England will expect ICBs to reorganise, with some resources ‘recycled into front line care’ to make the ‘significant but deliverable’ reductions.

It comes after Healthcare Leader revealed that more than 1,250 people have quit their ICB job since the bodies gained statutory footing in July.

NHS England said: ‘We believe that the level of reduction required is significant but deliverable. Setting the central requirement in terms of the overall RCA (which is based on population) for each ICB gives maximum flexibility to determine locally how to configure teams, what functions to outsource, and where to work across multiple geographies.’

This week, NHS England said it will contact ICB chief executives to discuss the changes and resources available, with regional teams expected to work with ICBs to support implementation.

Sarah Walter, director of the NHS Confederation’s ICS Network said the cuts will ‘likely impact some ICSs more than others’, as some will be further along in their development.

She said: ‘Where a number will have already made efficiencies through CCG mergers prior to ICB establishment, others who inherited several CCGs are just starting and the proposed flat percentage rate cut to costs should take this into account. 

 ‘ICS leaders will be concerned that this decision could create added risk when the system needs certainty, stability and an opportunity for recovery. Any further restructures will also potentially distract from core ICS business at a time when systems are still finding their feet, having only been established for eight months.’

She added: ‘Healthcare leaders are always striving to ensure that they are getting the best value for money for the patients and communities they serve and to reduce running costs when and wherever possible. This announcement provides welcome clarity for ICS leaders about future running cost allowances that systems will be expected to work within.’

In our report last month, Healthcare Leader revealed that some ICBs had seen nearly 100 people hand in their notice since July, with the total number of leavers across 39 ICBs breaching 2,000 people.

As 1,274 people have handed in their resignation and terminated their employment with the ICB.

A further 253 ICB employees have retired since July, 260 have left due to their contract expiring and 56 have been made redundant. Only eight people accepted voluntary redundancy.

Healthcare Leader’s investigation has also revealed that at least 19,066 people are currently directly employed by an ICB as of January 2023.

In total, ICBs employ 2,074 nurses and midwives, while the majority of employees – 13,074 – are classed as administrative and clerical staff.

A further 777 medical and dental staff are directly employed by their ICB.

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