Regional update on cost reduction approach   

Jim Mackey’s letter of last week outlined that ICBs will continue to play a critical role as strategic commissioners, focusing on commissioning and developing the conditions for neighbourhood health services.

We have now received a letter from Anne Eden, Regional Director - NHS England South East, regarding the requirement to reduce the running cost of ICBs by 50%.

The communication sets out further detail on the target reduction for each ICB across the country and aims to assist ICBs in our thinking prior to releasing the ‘Model’ ICB work at the end of April. The detail set out covers:

• The running cost reduction applies to running cost allowance (RCA*) spend and programme running cost spend (classified as ICB pay and CSU spend).
• The reductions aim to move ICBs from a national average of £32.98 per head of population to £18.76 in each ICB nationally.
• These figures exclude the impact of any future transfer of staff in respect to the delegation of Specialised Services.
• The reduction of cost per head of population for ICBs across the country is different and ranges from 27% to 63%.
• The figures show that BOB ICB will need to reduce its total running costs by net 35% to align with the £18.76 per head of population.

We are working through what this means for our ICB and will keep you updated as this work progresses.

In addition, the BOB ICB Board had a positive meeting with Frimley ICB’s Board today and we will share more information about this tomorrow.

*RCA covers salaries and benefits (including pension), office and administrative costs (including CSU), training and development and expenses for travel, accommodation, room bookings etc.