Recommendations & Conclusions
5 items
10
Conclusion
5th Report - NHS financial sustainabili…
Acknowledged
NHSE received significant extra funding from the government during the course of 2023–24. This included £2.8 billion to support new pay deals for staff, and £1.7 billion to mitigate the impact of industrial action. Despite this extra money, NHS systems still finished the year with an aggregated £1.4 billion deficit, …
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NHSE received significant extra funding from the government during the course of 2023–24. This included £2.8 billion to support new pay deals for staff, and £1.7 billion to mitigate the impact of industrial action. Despite this extra money, NHS systems still finished the year with an aggregated £1.4 billion deficit, which was double the £720 million deficit in the plans NHSE agreed with them early in the year.17
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Government response AI summary
NHS England and DHSC continue to work together to enable planning guidance to be published well in advance of the start of the financial year, and ideally before Christmas.
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HM Treasury
12
Conclusion
5th Report - NHS financial sustainabili…
Acknowledged
Demand for capital in the NHS continues to outstrip supply and the UK lags behind other OECD countries in terms of capital investment in its health system. DHSC has maintained its recent track record of not fully investing the capital funds HMT allocates it and instead reallocating large amounts for …
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Demand for capital in the NHS continues to outstrip supply and the UK lags behind other OECD countries in terms of capital investment in its health system. DHSC has maintained its recent track record of not fully investing the capital funds HMT allocates it and instead reallocating large amounts for day-to-day revenue spending. It transferred £0.4 billion from capital to revenue in 2022–23, £0.9 billion in 2023–24, and it told us that a similar amount of £0.9 billion would be switched during the current 2024–25 financial year.19 However, DHSC provided assurances that there would be no further transfers of capital to resource funding because the Chancellor has introduced new fiscal rules to prevent this from happening.20 14 Q 74, Final local government finance settlement: England, 2024 to 2025 - GOV.UK 15 Q 75 16 Q76 17 C&AG’s Report, para 1.8 18 Q 7 19 Q 18; C&AG’s Report, paras 4.21 and 4.23 20 Q 17 10
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Government response AI summary
The government stated that the fiscal rules set out by the Chancellor at the Autumn Budget 2024 mean that no further capital-to-revenue transfers will be used, and the department welcomes this decision. In 2025-26, a budget of £13.6 billion for health capital investment has been …
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HM Treasury
13
Conclusion
5th Report - NHS financial sustainabili…
Acknowledged
DHSC and NHSE told us that they were fully supportive of the new government’s aims to shift healthcare spending from treatment towards prevention, from hospitals to the community, and from analogue to digital. However, DHSC contended that these shifts would be hard to do and should take place only over …
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DHSC and NHSE told us that they were fully supportive of the new government’s aims to shift healthcare spending from treatment towards prevention, from hospitals to the community, and from analogue to digital. However, DHSC contended that these shifts would be hard to do and should take place only over the long term and not at the expense of today’s patients.21 The DHSC also emphasised that a shift towards prevention might be achieved through longer-term legislative and culture change such as the Tobacco and Vaping Bill. DHSC and NHSE acknowledged that the 10-year plan for the NHS was a timely opportunity to set out how the three big shifts would happen, including in terms of changing the balance of spending and investment over time. However, DHSC told us it still intended to prioritise resources on current pressures such as acute services in hospitals. It suggested that if money were needed for something urgent in A&E then that would inevitably be where it would be spent.22 Increasing productivity
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Government response AI summary
The government states that the financial position of NHS providers is significantly improved and that the 10 Year Health Plan will consider how to build a prevention-focused health system, shift the balance of care to community settings, and maximize the impact of digital technology.
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HM Treasury
14
Conclusion
5th Report - NHS financial sustainabili…
Acknowledged
According to official ONS measures, long-term productivity gains in the NHS averaged 0.6% a year over the period 1996–97 to 2018–19. But productivity subsequently fell, both before and during the pandemic, and has yet to recover fully. In March 2024, the government announced that the NHS would receive £3.4 billion …
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According to official ONS measures, long-term productivity gains in the NHS averaged 0.6% a year over the period 1996–97 to 2018–19. But productivity subsequently fell, both before and during the pandemic, and has yet to recover fully. In March 2024, the government announced that the NHS would receive £3.4 billion of capital investment for digital improvements between 2025–26 and 2027–28. As part of these plans, NHSE committed to achieving ambitious average productivity improvements of 2.0% per year through to 2029–30. NHSE’s modelling for the 2023 NHS Long Term Workforce Plan similarly assumes NHS workforce productivity will improve by 1.5% to 2% per year up to 2036–37, again far higher than the long-term average.23
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Government response AI summary
The NHS is working hard to recover lost productivity caused by the Covid-19 pandemic, NHS productivity continues to recover and to support this NHSE are focused on increasing clinical and operational productivity, improving staff retention, technology-enabled transformation, moving care to the right setting and improving …
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HM Treasury
16
Conclusion
5th Report - NHS financial sustainabili…
Acknowledged
We challenged NHSE on what it would do differently to achieve the ambitious annual productivity improvements it has committed to. NHSE told us annual productivity improvements were currently running at about 1.8% and it was confident that the annual gains that it has committed to of 2.0% could be achieved …
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We challenged NHSE on what it would do differently to achieve the ambitious annual productivity improvements it has committed to. NHSE told us annual productivity improvements were currently running at about 1.8% and it was confident that the annual gains that it has committed to of 2.0% could be achieved over the next two years. It contends that the previous two years had been affected by ongoing disruptions such as industrial action, and that further recovery was still possible, particularly through technology-enabled change. One example of such change was the use of large language models to capture notes during GP consultations.27 However, NHSE also continued to feel that some existing productivity improvements are not well measured at present. It felt that metrics, including that of the Office for National Statistics, do not yet fully capture productivity in important areas such as mental health and community services.28 Payment mechanisms that incentivise tackling health inequalities
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Government response AI summary
The NHS is working hard to recover lost productivity caused by the Covid-19 pandemic, NHS productivity continues to recover and to support this NHSE are focused on increasing clinical and operational productivity, improving staff retention, technology-enabled transformation, moving care to the right setting and improving …
Read full response →
HM Treasury