Part of “fundamental reset” package to address £6.6bn deficit Redundancy schemes also expected in NHSE and DHSC Integrated care boards have been told to cut their running costs in half by December.

Incoming NHS England chief executive Sir Jim Mackey informed ICB chief executives of the move during a phone call late this afternoon. The move comes just days after the announcement that NHS England and the Department of Health and Social Care would be subject to cuts on a similar scale.

ICBs had already been ordered to cut running costs by 20 per cent over the past two years.

Sir Jim told the ICB CEOs the Treasury would cover the cost of redundancies, which are likely to be necessary, and that cuts must be made by the third quarter of 2025-26. HSJ understands they were also informed that trusts would be required to cut managerial costs.

The measures are part of a “financial reset” package due to be outlined by Sir Jim to NHS CEOs in London on Thursday.

The cuts to integrated care board budgets will make it next to impossible for some individual ICBs to operate as a standalone organisations, or to carry out the full range of responsibilities originally given to them by the 2022 Health and Care Act.

ICB leaders said it would force an acceleration of joint leadership and management. Some ICB CEOs are already discussing working together across larger footprints, such as that covered by the West Midlands mayoral footprint. But so far there are only two shared chairs, and no shared CEOs, among ICBs.

The boards’ population coverage varies hugely, from 3.2 million in the North East and North Cumbria – where Sir Jim has long been an influential leader – to an average of one million in the Midlands and 850,000 in the South West.

NHS England had been planning to issue a new operating model in the next few weeks that would have clarified the roles of ICBs and trusts. This is now is likely to be revised.

News of the cuts was greeted with alarm by those working in ICBs.

One leader told HSJ the size and speed of the cut was “terrifying” and would throw management of the NHS “into chaos”. Another director briefed on the plan said it felt “like full panic mode and blunt cost cutting without clarity on purpose”.

It will mean their senior leaders needing to spend significant further time on restructures and job cutting in coming months.

The measures were presented to leaders as a consequence of the current economic circumstances squeezing public spending.

NHS Confederation CEO Matthew Taylor said of the move: ”We understand the precarious state of the public finances and our members are prepared to do what is required… But the reality is that these cuts will require major changes and they will inevitably make the task of delivering long term transformation of the NHS much harder.

“The 10 Year Health Plan will set out the government’s future ambitions for the NHS, and the danger is that we go too far and leave little to no capacity to deliver this long term transformation.”

NHSE and DHSC redundancies They also come alongside the sudden resignations of four NHSE executive board members, including CEO Amanda Pritchard, partly over government’s decision to carry out a major restructure of the service’s central management.

Cuts of roughly half will be made to “central” roles, NHSE staff have been told.

HSJ understands that on Wednesday Sir Jim told NHS England staff he was seeking government approval for a new voluntary redundancy programme covering the whole organisation, including its regional teams. He said further details of its restructure should be available in the near future.

And DHSC staff were told on Tuesday by interim permanent secretary Sir Chris Whitty there would be a voluntary redundancy programme across the department, known as a “civil service voluntary exit scheme”. Civil servants have also been told they will find out more about plans for the restructure of the department once a new permanent secretary is in post.