Spending watchdog warns of impact of service and financial pressures faced by NHS and councils on Integrated Care Systems

The wider service and financial pressures faced by the NHS and care providers pose significant risks to the ability of Integrated Care Systems (ICSs) to focus their attention and resources on local priorities, the National Audit Office (NAO) has warned.

In a report, Introducing Integrated Care Systems: joining up local services to improve health outcomes, the spending watchdog said the introduction of ICSs was widely supported by stakeholders, unlike a previous set of major reforms in 2012. Its survey of key stakeholders found that 76% support the introduction of ICSs.

But it warned that this restructuring “comes at a time of intense pressure on the NHS and its partners”.

The NAO noted that NHS and social care providers have high levels of staff vacancies, and in 2019-20, the year before extraordinary financial arrangements were put in place in response to the COVID-19 pandemic, around a quarter of both NHS trusts and Clinical Commissioning Groups (CCGs) overspent their budgets.

It added that local authorities were facing increasing demand for care services while local government spending power reduced by 26% between 2010-11 and 2020-21.

“These challenges have been further exacerbated by the pandemic which continues to put pressure on the NHS,” the NAO said.

The NAO noted that NHS England (NHSE) and the Department of Health and Social Care (DHSC) had recognised that efficiency targets must be realistic. “The scale of savings targets facing some ICSs will require even more effective partnership working to find and sustain efficiency gains. In this financial year, ICSs across England must make savings of £5.7 billion (equivalent to 5% of their budgets) to balance the books, and will then need to maintain this lower level of spending.”

The watchdog said that while NHSE had asked ICSs to take a long-term approach focused on preventing ill health, the targets it had so far set for ICSs were about short-term improvements, principally elective care recovery.

NAO case study interviewees meanwhile reported that NHSE’s scrutiny of them so far had focused on financial management and tackling elective care backlogs, with prevention rarely mentioned.

The NAO also said that there had been little progress on establishing a structured approach for addressing wider factors, such as healthy behaviours, social and economic reasons, and the physical environment, which are affected by the policies of almost all central government departments.

The spending watchdog said: “There is an inherent tension between the local needs-based care strategies that ICSs are expected to prepare and a standardised health service delivering national NHS targets. ICSs must manage these tensions, achieving stretching efficiency targets and the national priorities NHSE has identified if they are to create capacity and resources to respond to local priorities.”

The NAO has recommended that DHSC works with departments across government to establish arrangements to address issues beyond clinical healthcare that contribute towards poor health, such as education, employment, benefits, and transport.

“DHSC should also publish the assessment of long-term factors affecting the health and regulated social care workforce that it commissioned from Health Education England, and the NHS plan to address staffing shortages. It should then publish at least annual progress updates against it. NHSE and DHSC should also publish plans that address the current financial deficits faced by the NHS, and ensure oversight arrangements properly assess joint working between the NHS and local government.”

Gareth Davies, head of the NAO, said: “The new model of integrated health and social care services is being implemented with broad support, but at a time of extreme pressure on both services. To maximise the chances of success for these new arrangements, DHSC and NHS England need to put realistic medium-term objectives in place. They must also tackle pressures on ICSs that require action at a national level, including workforce shortages in health and social care.”

Cllr David Fothergill, Chairman of the Local Government Association’s Community Wellbeing Board said: “The LGA supports the introduction of ICSs, but we also share the concerns raised in this report, which rightly highlights the risk that the long-term aims of ICSs to prevent ill-health are being overshadowed because of a national focus from the Department for Health and Social Care and NHS England on short-term priorities such as elective care recovery.

“Developing a structured approach at national, regional and local levels to address the wider determinants of health is key to improving the health of our communities, and we strongly support the NAO recommendations that DHSC and DLUHC works across government to address issues such as education, employment, benefits and transport as part of their approach. Councils and Health and Wellbeing Boards must be at the heart of this revised approach as the community leaders and drivers of many of these services.

“The report highlights the great potential of ICSs to address both short-term and long-term measures which will improve health and wellbeing, but this potential can only be reached with adequately funded and resourced health and care services and by giving the time and space for all ICS partners to focus on local priorities for improving population health outcomes.”

See also: ICS lessons - Three months on from the commencement of the new statutory Integrated Care Systems (ICS) Anja Beriro and Gerrard Hanratty reflect on the main themes and issues that have come from the new relationship between local government and health.