DHSC and NHSE must ensure swingeing ICB cuts deliver lasting savings and protect workforce skills and capacity, the NAO has warned.

ICBs have been tasked with cutting costs by 43% and delivering £908m in annual savings to refocus on strategic commissioning, with planned workforce reductions of around a third (8,000) and £582m spent on redundancies in 2025-26.

The NAO recommends NHSE and DHSC should clearly define ICBs' future roles and ensure workforce reductions deliver sustainable savings without losing essential skills and capacity.

NHSE estimates ICB running costs for 2026-27 will be around £1.4bn, £200m above the £1.2bn target.

ICBs have chosen to form clusters or merge to cover larger populations and pursue efficiencies with the total number dropping from 42 to 25 ICBs or clusters by April 2026.

The redundancy process was delayed due to a wrangle between the Treasury and the DHSC over who paid for the bill.

NHSE paid for £401.5m of the £582m costs in 2025-26 with ICBs responsible for further costs in 2026-27.

The NAO report found early signs restructuring had left local authorities with gaps to fill and placed greater onus on health and social care providers to manage frictions in the health system.

A Department of Health and Social Care spokesperson said: ‘We are grateful for the dedication and hard work of everyone working across integrated care boards, in what has already been an exceptionally busy year.

‘Reducing ICB running costs and operating at an effective scale is a necessary part of reforming the NHS so that more funding reaches the frontline. These changes allow ICBs to focus on strategic commissioning and deliver the changes in our 10-Year Health Plan.

‘We thank the NAO for their report and their recognition that ICB clustering arrangements and mergers are already enabling benefits to be realised locally.'

Lee Peart is editor of Hemming Group’s Healthcare Management magazine.