Summary
This report examines the financial challenge facing NHS organisations in 2024/25.
Content
Key points
- The number one challenge facing NHS leaders and their staff is how they balance their books while protecting patient safety given many organisations are having to achieve significant efficiency savings.
- A comprehensive survey of NHS leaders carried out by the NHS Confederation shows that many NHS organisations are having to meet high efficiency targets of 5% and beyond, with some as high as 11%. This is the tightest financial position NHS organisations have faced in years.
- More than six in ten (61%) of NHS leaders say they will need top-up funding from the government within the year to have a chance of hitting their efficiency targets.
- This would mean some end the year in deficit against their plans, much like many did in 2023/24. The NHS Confederation has consistently said that this type of ‘boom and bust’ planning hinders NHS leaders’ ability to plan services and represents poor value for money.
- The main ways NHS leaders say they will reduce spending is by cutting spending on agency, locums and/or bank staff, as well as freezing vacancies. There is a dissonance between the government’s plans to expand the NHS workforce over the next decade through the NHS Long Term Workforce Plan and what NHS organisations are having to do in the short term, which will result in posts being cut or frozen.
- Two thirds say that industrial action will continue to contribute to them not being able to meet their targets. We are now almost 18 months into the industrial dispute, with further strikes set for late June. The government needs to find a solution as this has become ‘business as usual’ for the NHS, with implications for reducing waiting lists and staff morale.
- As well as industrial action, the major barriers to improving productivity continue to be lack of capacity in social care and a lack of capital investment, as well as the likely impact of having to cut non-clinical staff who would otherwise play a key role in helping to reform services. More than six in ten (61 per cent) of NHS leaders said they cannot meet their current targets without further capital investment, while more than eight in ten say there needs to be a funding increase for social care.
NHS Confederation: The state of NHS finances 2024/25
https://www.nhsconfed.org/publications/state-nhs-finances-202425
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