ICBs have been asked to cut their workforce by 50%, which equates to around 12,500 staff across the health system.
The news was revealed by chief financial officer at NHS England Julian Kelly at a hearing with the House of Commons Public Accounts Committee (PAC) this morning, and reflects targets for cuts to NHSE staff announced on Monday this week.
Earlier today, the Government announced that NHS England will be brought back into the Department of Health and Social Care (DHSC) to ‘end duplication’.
Speaking before the announcement, Mr Kelly said: ‘Sir James Mackey in coming in as the incoming chief executive, has set the target to reduce both the size of NHS England by 50% and has asked ICB to look at how they can reduce their size by 50%.’
He confirmed this would ‘require a redundancy scheme to achieve that scale of change’.
When asked about what difference this would mean in monetary terms, Mr Kelly said: ‘In really simple numbers, we had already set a budget for around 15,000 people in NHS England, if you take 50% of that number out you would be saving on an annualized basis, when completely delivered around £400 million pounds.
‘And in ICBs, they currently employ around 25,000 people. If you reduce their staff by around 50% you would be achieving around £700-750 million pounds of savings on an annualized basis, once fully delivered.’
He clarified that this number is administrators that are not providing frontline services.
When asked about what it would mean for already efficient ICBs, Mr Kelly said that detail would be in the 10-year plan.
He said: ‘Somebody’s going to have to be working out exactly what is the relationship between, not just the Department and NHS England, but NHS England and ICBs, and what are the expectations on providers as well as ICBs as and I think that detail will become clear as the Secretary of State the Department and the NHS team finalise the 10 year plan.’
He added that he was only told the decision yesterday.
NHS Confederation chief executive Matthew Taylor said: ‘We understand the precarious state of the public finances and our members are prepared to do what is required. The short term task is to stabilise NHS finances and do everything possible to reduce the NHS’ deficit, and our members will work with the government and NHS England to do that. But the reality is that these cuts will require major changes and they will inevitably make the task of delivering long term transformation of the NHS much harder.
‘The 10-Year Health Plan will set out the Government’s future ambitions for the NHS, and the danger is that we go too far and leave little to no capacity to deliver this long term transformation. Where possible we must find ways to support the long term shifts that the government itself, alongside our members, are committed to making.’
It comes after NHS England said it was considering a ‘fundamental reset’ of the financial regime and accountability to ‘get a grip’ on the situation.
ICBs have been under pressure to cut their running costs by 30% by 2025/26, which was announced just before the start of the 2023/24 financial year.
In July last year, ICB leaders delivered a damning verdict into the state of their finances, with 15 out of 19 ICB chief financial officers saying their financial position had deteriorated in 2023/24.
The NAO NHS financial management and sustainability report 2024 estimated there was £1.4bn aggregated deficit in 2023/24 across the 42 integrated care systems (ICSs), with three ICBs in NHS England’s Recovery Support Programme alongside 21 trusts.
Last year, an investigation by Pulse’s sister title Healthcare Leader revealed that ICBs had saved £25m through redundancy since they were set up in July 2022.
A version of this story was first published by Pulse sister title Healthcare Leader
