How ICBs Balance the Books While Still Innovating: The New NHS Reality

The creation of Integrated Care Boards (ICBs) was meant to usher in a new era for the NHS, with greater collaboration, better population health outcomes, fewer institutional silos and a shift toward preventative care.

But the timing could not have been more challenging. ICBs were launched into one of the most financially unstable periods in the history of the NHS. Rising demand, shrinking workforce, inflationary pressures and political expectations around elective recovery have all created a system in which every pound now has to work harder than ever before.

Yet despite this environment, there is a clear expectation that ICBs must not only preserve financial control but also innovate. They are expected to transform care pathways, redesign services, adopt new technologies, expand community care and improve outcomes, all while balancing their books.

On the surface, these ambitions appear contradictory. How can an organisation struggling to meet statutory financial duties be expected to deliver large-scale service redesign and invest in new ideas?

This is the critical tension shaping decision making in every ICS across England today. And the answer reveals a great deal about how innovation must now be framed and delivered to succeed in the NHS.

Financial control comes first: why ICBs cannot afford high risk innovation

First and foremost, financial stability is not negotiable. The underlying architecture of the ICS model places a legal requirement on ICBs to remain within budget.

NHS England directly performance manages this requirement and deviation triggers intense scrutiny, regulatory intervention and, increasingly, public commentary. ICS boards know overspending attracts the kind of attention that can derail leadership teams and slow wider system progress.

ICBs simply cannot afford to take risks on ideas that fail to show a clear, evidence based route to financial benefit. They cannot rely on optimistic promises of saving money in three to five years’ time. They need to see improvements materialising in 12-24 months. Innovation must be low risk, data driven and directly connected to solving financial stress.

This is why the NHS today is not looking for innovation for innovation’s sake. It is looking for innovation that can demonstrate measurable value.

What “measurable value” really means to ICBs

Measurable value for an ICB means real world improvements in:

–  patient outcomes

–  operational pressure

–  workforce burden

–  utilisation cost

–  hospital activity

–  commissioning spend

In other words, better outcomes + reduced system pressure = value.

Whether the idea is digital, clinical, diagnostic or community based, the key is evidence that the innovation will remove cost or workload.

That might mean preventing readmissions, reducing demand on General Practice, shortening diagnostic pathways or eliminating inefficient follow-ups.

NHS leaders are now applying something like a four point test:

1.        Does this improve patient outcomes?

2.        Does it reduce system cost or workload?

3.        Can we deliver it with the workforce we have?

4.        Is there a clear return on investment?

If the answer to any of those questions is “no,” the idea usually goes no further.

Innovation that releases cash, capacity or activity is what gets funded

ICBs are now prioritising projects that release either cash, capacity or activity from the system.

Typical examples include:

• Virtual wards reducing emergency admissions.
• Community gynaecology or dermatology reducing outpatient referral pressure.
• Community diagnostic hubs removing follow-ups.
• Chronic disease management reducing readmissions.
• Medicines optimisation lowering prescribing spend.

Innovation that adds activity is almost impossible to land. The philosophy is simple; if the innovation doesn’t make next year easier, cheaper, faster or safer, it will struggle to gain traction.

There is still an appetite to invest. What has changed is the level of scrutiny around return on investment.

ICBs are looking for upfront investment linked to guaranteed outcomes, detailed financial modelling, 12-24 month payback periods, realistic scale-up projections and evidence from other regions.

“Invest to save” is no longer enough on its own. It must be invest → prove → save → scale.

If implementation costs are high, workforce requirements are unclear, or evidence is thin the risk becomes too great.

Innovation hasn’t disappeared, it’s been rewired around system value

Despite the headlines, innovation has not died inside ICBs.

Most systems maintain protected budgets for transformation programmes, productivity improvement, pathway redesign, technology implementation or prevention and population health initiatives.

These funds allow ICS leaders to spend without destabilising the core operational budget. The spending is controlled, prioritised and linked to national targets but it shows there is room for innovation, especially when aligned to strategic need.

One of the biggest shifts since the move to Integrated Care Systems is that innovation must benefit the system, not one provider.

Projects framed around the needs of a single Trust, PCN or department rarely succeed now.

Why Provider Collaboratives are now the real gatekeepers of NHS innovation

Provider Collaboratives are becoming a major mechanism to make this happen. These are formal partnerships between NHS Trusts that share accountability, budgets, workforce and service delivery across a wider population footprint.

Instead of Trusts competing to retain activity or protect revenue, Collaboratives allow them to redesign pathways together, remove duplication and reduce internal variation. For innovators and suppliers, this changes the conversation, and success increasingly depends on proposing solutions that work across the Collaborative footprint, rather than solving a localised problem on a single hospital site.

In many ICSs, major transformation decisions are now channelled through Provider Collaboratives rather than individual Trust boards. Elective recovery, urgent and emergency care programmes, cancer pathways, diagnostics and high cost specialised services are being driven and governed at collaborative level.

This means innovations that demonstrate benefit for the whole patient flow are significantly more attractive than point solutions created for just one organisation. Provider Collaboratives are also acting as an operational testing ground for new workforce models, digital interoperability, estates planning and cross Trust clinical governance, which creates fertile ground for industry to co-design solutions that can be standardised and then scaled across whole systems.

Ultimately, the ICB and the Provider Collaborative model are pushing NHS transformation away from fragmented improvement and toward population level redesign. The future does not sit with standalone hospital projects but with cross Trust pathways, shared data, joint procurement and standardised clinical approaches that improve outcomes and release capacity across the entire region. This is where innovation now lives.

From organisational wins to whole system impact: how ICBs now make decisions

ICBs are increasingly moving away from organisation level thinking and instead assessing every innovation through the lens of whole system value. This means decisions are based on whether the idea supports the strategic direction and operational pressures of the wider Integrated Care System. As a result, proposals are now tested against system wide criteria such as:

• Does this reduce hospital inflow?
• Does this support neighbourhood care models?
• Does this improve discharge and flow?
• Does this improve population outcomes?
• Does this reduce inequalities?

Innovation that works only for one part of the system risks simply shifting cost, demand and pressure elsewhere. That is fatal to decision making because it fails to deliver true efficiency or measurable system benefit.

ICBs want innovation that removes duplication, improves patient journeys across organisational boundaries and positively affects outcomes from primary care through to acute and community services.

In the new NHS operating environment, solutions must benefit the whole pathway otherwise they won’t progress.

Innovation by redesign, not addition: why pathway change beats new pilots

Another major shift is that innovation is now synonymous with redesign, not addition.

Consider changes such as moving post-surgical care into community clinics, automating data capture and coding, reducing tests and repeats or streamlining a chronic care pathway.

These are examples of innovation through rationalisation, removing wasted steps before adding anything new.

ICBs are increasingly adopting new technology or treatment only when combined with pathway change, ensuring investment does not create extra activity cost.

ICBs are no longer keen on untested pilots. They are eagerly watching GIRFT data, NHS benchmarking, national pilots, academic studies and peers already using the model.

If another ICS has proven results, local risk is dramatically reduced. This also speeds up adoption. The days of bespoke local pilots that reinvent the wheel are fading fast.

Why ICBs are willing to work with industry – but only on their terms

A striking trend in 2024 and 2025 was the growing willingness to work with industry, but on ICB terms.

Many systems are asking companies to fund transformation support or nursing resource early on, embed data and analytics, help define pathways, build evaluation frameworks and share risk.

Industry led service redesign is becoming a currency that NHS leaders value. It reduces cost and complexity and delivers evidence, all of which protects the underlying financial position.

Innovation is no longer competing against financial control; it is becoming the mechanism for financial control.

Without transformation, demand keeps rising, hospitals stay full, staff burnout continues, costs escalate and financial deficits widen. ICBs are reaching the conclusion that the only way to stay financially viable is to innovate faster.

Virtual wards, outpatient redesign, neighbourhood care and chronic disease optimisation are not discretionary projects – they are survival strategies.

What does this mean for those wanting to work with ICBs?

It means the framing of innovation must change:

• Don’t sell products. Sell outcomes.
• Don’t show features. Show capacity release.
• Don’t talk about why something is clinically interesting. Show how it reduces activity cost.
• Don’t promise long term transformation. Provide short term evidence.

Those who understand this shift will thrive. Those who don’t will find ICB doors increasingly hard to open.

ICBs today are navigating one of the hardest balancing acts in the public sector. They must operate under strict financial control totals, yet they must redesign care at scale. They must save money yet must spend to transform. They must innovate yet cannot risk destabilisation. The challenge is unprecedented, to deliver a better NHS with fewer people, less money, and rising demand.

Financial pressure has forced conversations that would never have happened before. It has driven organisations to think differently about the whole patient journey, about outcomes not activity and about prevention rather than contingency.

The answer to this tension lies in measurable, evidence driven value. Innovation must reduce system pressure and improve outcomes. It must work within real workforce and financial constraints. It must show returns quickly. And it must be delivered through redesigned pathways, not additional cost. Innovation must be judged not by theoretical benefit, but by real world impact.

The future NHS will not be built by adding more clinics, more outpatient appointments, or more hospital beds, but by removing avoidable demand, decentralising care, digitising routine process, and empowering patients to manage conditions earlier and better.

Innovation in the NHS is no longer a luxury; it is the only viable route to a sustainable future. The coming years will reward those organisations that understand the system, align with it and help shape it.

A practical guide to getting innovation into NHS pathways – and keeping it there

If this article resonates with you, you may find real value in my recently published book, Embedded: How Pharma, MedTech and Device Companies Can Get Their Products into NHS Pathways and Stay There.

The book explores in detail:

• How the NHS actually makes decisions today.
• What measurable value really means to ICBs.
• How to build commercial offers around system pressure and outcomes.
• Why pathways matter more than products.
• And how to position innovations to not only be adopted but stay implemented.

Embedded is written for anyone who wants to work more effectively with the NHS, whether you are inside a life sciences company, delivering innovation in health technology, or leading transformation within the service itself. It has been built on real NHS conversations, real engagement work and real examples of what succeeds and what fails across Integrated Care Systems.

At www.scottmckenzieconsultancy.com, we work directly inside the NHS, supporting provider collaboratives, commissioners and system leaders to implement real change. We then help pharma, medtech and device companies interpret what’s happening, so they can engage the right stakeholders, align with NHS priorities and get their innovations embedded into care pathways.

With more than 20 years working within the NHS and Pharma, medtech and devices companies, Scott brings a unique dual perspective, now captured in his book, Embedded: How Pharma, MedTech, and Device Companies Can Get Their Products into NHS Pathways and Stay There, which distils everything he’s learned into a practical playbook. Whether you’re launching a new product or trying to unlock stalled adoption, Embedded shows you how to reframe your offer, align with NHS priorities and make change stick.