Integrated Care Boards have moved rapidly to restructure their organisations, reduce staffing levels and introduce new operating models in response to NHS England savings requirements. However, the National Audit Office has warned that it remains unclear whether these changes will leave ICBs with the expertise and capacity required to deliver effective strategic commissioning in the years ahead.
The warning comes as ICBs continue implementing far-reaching reforms designed to reduce management costs and sharpen their focus on commissioning services across local health economies.
Following a review of NHS management structures in 2024, NHS England announced plans to reshape ICBs, placing greater emphasis on strategic commissioning while reducing duplication and administrative spending across the system.
ICBs were instructed to cut running costs by 43% from their previous collective expenditure of around £2 billion. The objective is to deliver annual savings of £908 million.
Despite significant progress, NHS England estimates ICB running costs will reach approximately £1.4 billion in 2026-27, leaving them £200 million above the original £1.2 billion target.
To meet these demanding financial requirements, ICBs have adopted different approaches based on local circumstances. Some organisations have been required to make significantly larger reductions than others.
Many have chosen to merge or form operational clusters covering larger populations to improve efficiency and streamline services.
As a result, the number of ICBs has fallen dramatically, reducing from 42 organisations to 25 ICBs or clusters by April 2026.
According to the NAO, healthcare leaders identified several benefits from these arrangements, including greater opportunities for collaboration, reduced duplication and improved organisational resilience.
By June 2026, most ICBs surveyed by the NAO had introduced new operating models designed to lower running costs while supporting a stronger strategic commissioning function.
Planned efficiency measures include:
- Streamlining corporate and support services
- Removing duplicated functions across organisations
- Increasing the use of digital technologies and automation
- Refocusing resources on strategic planning and commissioning activities
These changes represent one of the most significant shifts in NHS system leadership structures since the creation of ICBs in 2022.
Much of the anticipated savings will be achieved through workforce reductions.
NHS England estimates that delivering the required £908 million in savings will mean removing around 8,000 full-time equivalent posts, representing roughly one-third of the total ICB workforce.
However, redundancies have progressed more slowly than originally anticipated. The restructuring process has also affected staff morale, strained relationships with local partners and raised concerns about organisational capability during a period of significant change.
During 2025-26, ICBs spent £582 million on redundancy costs. This included £401.5 million in funding provided by NHS England, with any additional redundancy liabilities in 2026-27 to be met by individual ICBs.
While many ICBs have worked hard to shield frontline services from disruption, the NAO identified early signs that some areas are beginning to feel the impact of the reforms.
There are concerns that reduced capacity within ICBs could leave local authorities having to fill emerging gaps, while healthcare providers may be required to shoulder greater responsibility for resolving operational challenges across local systems.
The watchdog highlighted that a central challenge will be balancing large-scale workforce reductions with the need to retain specialist expertise and organisational capability essential for effective strategic commissioning and delivery of the Government's ten-year health plan.
The report also found that many ICBs struggled to plan their future workforce because their responsibilities continued to evolve throughout the restructuring process.
This uncertainty has made long-term workforce planning particularly difficult and increased concerns over whether the right skills will remain in place once restructuring is complete.
To ensure the reforms deliver sustainable savings without undermining system leadership capacity, the NAO has recommended that NHS England and the Department of Health and Social Care:
- Clearly define the future roles and responsibilities of ICBs, supported by robust measures of performance, capability and reform success.
- Ensure workforce reductions create lasting efficiencies while protecting critical skills and avoiding unnecessary redundancy costs where staff later return elsewhere in the NHS.
- Support ICBs in sharing best practice and maintaining strong relationships with local partners, while ensuring reforms across health, local government and wider public services remain aligned.
The coming months will be critical in determining whether ICBs can successfully transition into leaner organisations while retaining the strategic leadership capability required to drive integration, improve outcomes and support the long-term sustainability of NHS services.
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