Financial choices made by NHS leaders, as uncovered by a King's Fund study, are geared towards preserving patient care amidst financial pressure.
In England, NHS leaders are grappling with significant financial challenges that include large budget overspends, workforce shortages, and the need to achieve historic efficiency gains while maintaining care quality. The health service is required to deliver a projected £2.2 billion central deficit support, a 7.1% efficiency target, and a 2% workforce reduction for the 2025/26 fiscal year, all amidst rising demand and the complexity of care.
One of the key financial challenges is overspending, with some NHS boards reporting budget overspends, such as the £28 million overspend approved by NHS Dumfries and Galloway. Workforce pressures are another significant issue, as recruitment freezes coexist with rising demand, leading to stress, burnout, and morale issues among staff, which further affect efficiency and performance.
To address these challenges, measures are being taken, such as demanding financial plans and savings, strengthening financial governance, long-term planning and funding reforms, targeted funding allocation, and safeguarding care quality amid cuts. NHS entities are required to deliver record savings and efficiency gains, with rigorous savings targets and monitoring of agency workforce use. NHS boards are improving financial oversight, controls, and partnerships to manage spending within budget caps.
The government's 10-year health plan emphasizes restoring financial discipline by ending routine deficit funding, encouraging 5-year financial sustainability plans, and moving from block contracts to outcome-based payment models like ‘year of care’ payments to improve productivity and care quality. Extra funding aims to be distributed more equitably, focusing on areas with higher health and economic challenges. The introduction of Quality Impact Assessments (QIAs) ensures that efficiency and workforce cuts do not compromise patient care.
Despite these measures, the scale of challenges, especially workforce and waiting times, continues to present a risky tightrope for NHS leadership. For instance, over 8.5 million people are projected to be on NHS waiting lists in 2025, with over 400,000 waiting more than a year, creating both health and financial challenges.
Recent developments include the announcement of an additional £22.6 billion GBP NHS funding in the 2024 Autumn Budget, yet the first iteration of financial plans for 2025/26 showed a 'very significant financial deficit' of £6.6 billion for NHS systems. The latest British Social Attitudes survey shows public satisfaction with the NHS is at its lowest level since the survey began over 40 years ago.
A new study published on Sunday 18th May reveals tough financial decisions NHS leaders are making to balance their books and protect patient care. The study, conducted by researchers from The King's Fund health and care charity, found examples of local NHS leaders cutting services like patient transport, freezing recruitment, and reducing agency staffing.
The authors call for clarity about how the NHS should prioritize funding to deliver reforms versus maintaining the services people are currently using every day. The government has previously stated that they will need to make tough trade-offs to achieve the goal of NHS reform. The researchers recommend NHS Trusts are set multi-year budgets instead of the current annual approach to provide greater funding certainty for NHS leaders.
Patients are experiencing long waits for care, are treated in dilapidated buildings, and report worsening experiences. The maintenance backlog to return NHS buildings and equipment to an acceptable standard has been growing, currently standing at £13.8 billion. The impact of the financial strains on the NHS is shown in the findings of the latest British Social Attitudes survey.
In conclusion, NHS leaders in England are managing a challenging financial environment with stringent efficiency and savings targets, workforce constraints, and high unmet demand. While measures are being taken to address these challenges, the impact on patient care and public satisfaction remains a concern. The need for realistic expectations and clear priorities in funding allocation is increasingly apparent.
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