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

ICSs are the latest in a long line of restructures by the Department of Health & Social Care (DHSC) aimed at improving health outcomes and efficiency by joining up health and care services.1 Their introduction is widely supported by stakeholders, unlike the previous set of major reforms in 2012. The NAO’s survey of key stakeholders found that 76% support the introduction of ICSs. NHS England (NHSE) consulted extensively in designing and implementing ICSs, by first testing and then refining its plans in response to feedback.

However, this restructuring comes at a time of intense pressure on the NHS and its partners. 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 trusts2 and Clinical Commissioning Groups (CCGs)3 overspent their budgets. Local authorities are 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.

NHSE and DHSC have 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.

NHSE has asked ICSs to take a long-term approach focused on preventing ill health, but the targets it has so far set for ICSs are about short-term improvements, principally elective care recovery. NAO case study interviewees reported that NHSE’s scrutiny of them so far has focused on financial management and tackling elective care backlogs, with prevention rarely mentioned. NHSE has allocated £97 million across all 42 ICSs for efforts to improve prevention and an additional £200 million for tackling health inequalities, compared with £2 billion to tackle elective care backlogs. NHSE commissions prevention services including immunisation and screening programmes at national and regional levels. These programmes cost £1.4 billion in 2019-20.

NHSE and DHSC recognise that health outcomes are largely driven by wider factors beyond clinical healthcare, such as healthy behaviours, social and economic reasons, and the physical environment. However, there has been little progress on establishing a structured approach for addressing these wider factors, which are affected by the policies of almost all central government departments.

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.

To maximise the chances that ICSs can make meaningful progress in achieving their aims, the NAO recommends 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.

“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.”

Gareth Davies, head of the NAO

Read the full report

Introducing Integrated Care Systems: joining up local services to improve health outcomes

Notes for editors

  1. ICSs are made up of organisations involved in planning and providing care in a particular area, including hospitals, GPs, local authorities, social care services, primary care providers, and independent and voluntary sector providers. The four core purposes of ICSs are to: improve outcome in population heath and healthcare; tackle inequalities in outcomes, experience, and access; enhance productivity and value for money; and help the NHS support broader social and economic development.
  2. In each of the 42 areas, NHS bodies and local authorities come together to form two system-wide entities:
    • An Integrated Care Board (ICB), which is an NHS body, with members nominated by NHS trusts, providers of primary medical services, and local authorities. The ICB receives funding from NHSE for commissioning NHS services across the ICS area.
    • An Integrated Care Partnership (ICP), a committee jointly formed by the ICB and local authorities in the ICS area, with other invited bodies, for example third sector organisations. It creates an Integrated Care Strategy (ICP strategy) that sets out how the health and care needs of the local population will be met by the ICB, local authorities and NHS England. These bodies must then have regard to the strategy when planning and delivering services.
  3. NHS trusts are legal entities, set up by under the National Health Service Act 2006, to provide goods and services for the purposes of the health service.
  4. Clinical Commissioning Groups (CCGs) were responsible for implementing the commissioning roles out in the Health and Social Care Act 2012. All CCGs were abolished with the passing of the Health and Care Act 2022 on 1 July 2022.
  5. An online data visualisation to accompany the report will be available from the date of publication. This data visualisation will consist of a map of England showing ICS boundaries which will allow users to display and compare a range of financial and health activity and outcome metrics across ICSs, for example, NHS and social care vacancies, waiting lists, GP appointments, inequality in life expectancy, cancer diagnosis, surplus/deficits, and planned financial savings, amongst others.
  6. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.

About the NAO

The National Audit Office (NAO) scrutinises public spending for Parliament and is independent of government and the civil service. It helps Parliament hold government to account and it uses its insights to help people who manage and govern public bodies improve public services.

The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The NAO audits the financial accounts of departments and other public bodies. It also examines and reports on the value for money of how public money has been spent.

In 2021, the NAO’s work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £874 million.

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