27 May 2022 – non-executive directors – shaping the ICB audit committee: is it more than just for money?

This week’s session opened in conversation with Alan Edwards, Deputy Chair of Birmingham Women’s and Children’s NHS Foundation Trust and chair of the audit committee, and NED designate and chair of the audit committee for the Black Country ICB.

Alan set out four main challenges facing ICSs and highlighted the audit committee’s potential role in rising to those challenges.

“The first one is creating an integrated care board and ensuring it’s well-led. We know that the best organisations have effective processes and systems in critical areas like governance, risk management and finance. We know about the role of the audit committee. We’re creating a new organisation from an existing one. We’re talking about a transfer of existing activity based on sound due diligence. In many ways this is one of the easier challenges so I’m expecting a pretty smooth transfer.

“The second challenge is creating an integrated care partnership and a wider system architecture and then assuring that the constituent parts are well-led. This is where it starts to get a little bit harder. The one pretty common comment is ‘I’m not really sure how this is going to work’. There’s a worry that we’re creating too many organisations and that we’ll be over-governed. We’ve got to create place-based arrangements, which is in many ways the integration engine room. This is the real move from competition to collaboration – a massive cultural shift for us.

“We need to be honest with each other: we have some historical cultural and organisational challenges to face up to that won’t be easy. We’re seeing some change – two providers in the Black Country are working very closely together and we’re seeing some really interesting developments and some real positives. The role of the audit committee is potentially assuring the ICB that we have effective governance across the system, that we have a robust reporting regime, that we have sound financial management reporting and regimes in place, and maybe we also need to look across the system at value for money.

“Challenge number three is delivering system aims and outcomes. I was struck by a comment by Matthew Taylor, chief exec of the Confed, who said he feared integration is everyone’s problem but no one’s responsibility. So is there a role for the audit committee to embrace the measurement agenda around all this activity and the changes we’re trying to make. Working with the IPPR, Carnall Farrar has produced a set of metrics based on 28 indicators looking across physical and mental health, health and social care, community and hospital care and it gives you an assessment of how you compare with other organisations around the country. There’s an opportunity for the audit committee to ensuring we have effective use of data and system measures.

“The fourth challenge is to look longer term and ensure the system is ready for future challenges. I’m thinking here of sustainability, and future risks and opportunities. I’m thinking particularly about net zero carbon and the importance of the NHS being a leader in so-called ESG reporting. But also preparing for future pandemic risks, including workforce planning, and longer-term issues around how we get future levels of funding in our area to reflect our levels of deprivation. For me, it’s the audit committee’s role to assure us that we’re considering the longer term.

“I wonder if we should create an audit committee and a value panel, to bring together money and outcomes and look at value.”

Also overheard during the discussion:

“We must bring together outcomes and money as a board unless we are ineffective.”

“We can learn from Police Joint Audit Committees where inter-force collaborated services have been in place for some time. After an internal audit of the governance arrangements and a panel of three audit committees we quickly realised these arrangements worked due to clear lines of responsibility.”

“If the focus of the audit committee is on the achievement of the ICS strategies, then all provider organisations would be bought into this and there should be a joint focus to ensure the best outcome, and a well led approach. Different organisations will be at different stages and can learn from each other.”

“This means that measures of operational performance have to be very, very sharp and meaningful, otherwise we're auditing fluff. We must institutionalise scepticism and ensure we’re not accepting the data that comes to us as ipso facto meaningful just because it’s data that’s put in front of us.”

These meetings are by invitation and are open to all NHS non-executives directors, chairs and associate non-executive directors of NHS providers. Others may attend by special invitation.

If you have any comments, questions or suggestions about these webinars, please contact: events@good-governance.org.uk