I assume that there is no obvious option within hugo that I am missing.
I can solve this by letting hugo create individual ics files that contain VEVENTβs and run an additional script to collect all these separate files in to a single overall index.ics file.
I was already thinking that because I had set Calander (and html) in the list of outputs in my frontmatter for events, this would result in hugo automatically invoking a list template for me. I tried creating a file called layouts/events/list.ics for this purpose but this had no affect.
I will go back in review the documentation again and see if I can identify the best place to add my list template and use this to generate my file in events/index.ics.
I have got this working correctly with a layouts/events/list.ics file.
My earlier attempts failed due to lack of content/events/_index.md file which I had not previously required.