The bodies that coordinate and deliver NHS care across England are on track to spend £4.9bn more than previously planned this financial year, Sky News has found.
The data was obtained through freedom of information requests to England’s 42 integrated care systems (ICSs), which are responsible for allocating the NHS budget to local trusts and commissioning services in their area.
Sky News obtained figures from 41 ICSs, every one of whom reported being in deficit in their latest financial disclosures.
As of September, six months into the current financial year, England’s ICSs had overspent by an estimated £2.5bn. If overspending continues at the same pace, that will mean spending of £4.9bn more than planned by the end of March 2024.
“This is the most worried I’ve been about financial pressures in the NHS since 2017,” says Siva Anandaciva, chief analyst at the King’s Fund, a health thinktank.
“In the old days, you would have had maybe a handful or two of organisations that are under serious financial pressure, but these figures show that financial pressures are incredibly widespread.”
ICSs can’t go bankrupt, but they can be forced to cut back on services and long-term investment.
“That’s been the same story now for over five years,” says Sally Gainsbury, senior policy analyst at the Nuffield Trust.
“There’s money put aside in the budget for improving services, and then much of it never gets spent on that because it ends up that they can’t even afford the day-to-day running costs.”
On 7 December, NHS England announced that additional funding had been made available to ICSs, some of which was taken from other areas of spending.
The additional funding has reduced the deficit faced by ICSs to £420m as of October. However, no additional funding has yet been made available to address additional costs resulting from the upcoming strike by junior doctors.
As part of their regular financial reporting, ICSs produce their own forecasts for where they think their deficit will end up at the end of the year.
Across the 41 systems, which accrued an estimated £2.5bn deficit by September, forecasts for the next six months suggested that the ICSs will cut this deficit to just £745m.
“Winter is not the time when the NHS makes money,” Mr Anandaciva says.
“What happens during winter, at least during the last 15 years, is you start cancelling electives and losing income on those.
“I look at those charts and I just don’t… I think they’re optimistic. Wildly optimistic, in some cases.”
Which areas are struggling most financially?
Sky News was able to obtain the latest financial disclosures for 41 of England’s 42 ICSs. Every one of them, as of their latest disclosure, was in deficit.
Many ICSs were already facing challenging spending targets at the start of this financial year in March, with one in three submitting deficit plans.
Systems are supposed to submit balanced budgets for the year. Mr Anandaciva says it’s an “incredibly painful” process for a system to agree a deficit plan with NHS England.
All of the 15 ICSs that submitted deficit plans have overspent those plans, according to their most recent published disclosures.
“So, they were planning for a bad-case scenario and things have gotten even worse,” he adds.
Lancashire and South Cumbria ICS, for instance, was planning for a £27m deficit by July, but instead overspent by £112m – equivalent to 8.4% of its overall budget for that part of the year.
Like many ICSs facing large, unplanned deficits, Lancashire and South Cumbria forecast in July that it would meet its year-end commitments and cut its deficit to the planned £80m. That would have required a surplus of £32m in the final eight months of the year.
A spokesperson for Lancashire and South Cumbria Integrated Care Board said: “During the financial year 2023/2024, the Lancashire and South Cumbria Integrated Care System has responded to a number of in year pressures which have contributed to the reported financial deficit.
“At month 04 [July], the cumulative reported position across the system as a whole was off plan and organisations are working hard, both individually and collectively to improve this.”
In Shropshire, Telford and Wrekin, the six months to September saw the local ICS accrue a deficit of £74.5m – equivalent to 7.9% of the entire budget for that half of the year.
A spokesperson for NHS Shropshire, Telford and Wrekin, said: “Shropshire, Telford and Wrekin Integrated Care System continues to be financially challenged due to increased and sustained system pressures in urgent and emergency care, planned care activity costs and inflation related cost pressures in areas such as prescribing and the purchase of individual care packages.
“We are working to reduce the deficit and each organisation within the system is currently assessing how they could improve the financial position, with a focus on efficiency, productivity and building a sustainable workforce in order to help achieve targets.”
Industrial action adding to soaring spending
One of the major pressures on NHS budgets this year has been industrial action, with strikes forcing NHS systems to hire expensive temporary staff to fill the gaps left by striking workers.
In their annual plans in March, 34 ICSs set out what they expected to spend on agency and locum over the course of the year.
Six months into the year, in September, Sky News estimates that these 34 ICSs had already spent three-fifths of this budget.
Altogether, these 34 ICSs spent an estimated £1.4bn on agency and locum staff in the first half of this financial year.
Shropshire, Telford and Wrekin ICS has been one of the largest over-spenders, spending £29.5m on agency and locum staff in the six months to September. That’s already more than the £27.2m annual limit on agency spending that the system had agreed with NHS England at the start of the year.
“The strikes are a big part of the story this year, but I still think we’d be in financial pressure without them,” Mr Anandaciva says.
“I think fundamentally, the story is there wasn’t enough funding in the system to meet the demands that were being asked of the system.”
An NHS spokesperson said:
“This story is misleading – although significant additional costs have been caused by the impact of strike action and higher than expected inflation, further funding has been made available to local areas which means their remaining year to date overspend is £471million – which is £2 billion less than Sky has estimated.
“Thanks to the NHS expanding staff numbers, agency staff spend has dropped compared to last year – despite strikes meaning the NHS needed to employ more agency staff than planned.”
A Department of Health and Social Care spokesperson said:
“While spending has increased in the last year due to workforce pressures, industrial action and the recovery of services, we are supporting the NHS with record funding, with the budget in England due to increase to £162.5 billion in 2024-25, up from £121.7 billion in 2019-20.
“Where organisations do get into financial difficulty, NHS England will provide intensive support with their Recovery Support Programme. To ensure the continuity of patient services, the government will provide short-term cash support to help pay their bills.”
Methodology
Sky News obtained financial data from 41 out of England’s 42 Integrated Care Systems through their board papers and freedom of information requests. Not all ICSs provided data to September 2023.
Where necessary, and following consultation with the Nuffield Trust and King’s Fund, data was extrapolated based on current trends. Aggregated estimates for September required data for some ICSs to be extrapolated from July or August. Estimates for March 2024 were based on extrapolations from the latest data available (July, August or September), in order to provide a full-year estimate based on current trends.
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
