In late April/early May 2024, the NHS Confederation surveyed leader opinions across all parts of the NHS on the state of finances and the challenges faced this year in balancing the books, improving performance against key targets and protecting patient safety.
The resulting report, published today (May 31), exposes a financial position that is the tightest faced by NHS organisations in years, with many having to meet efficiency targets of 5% and beyond – some as high as 11%.
The major barriers to improving productivity continue to be lack of capital investment, lack of capacity in social care and the likely impact of having to cut non-clinical staff who would otherwise play a key role in helping to reform services.
The NHS Confederation reports that 67% of Trusts and ICBs plan to reduce clinical staff to meet their efficiency targets, and 90% plan to reduce non-clinical staff, a measure that simply increases the admin burden on clinical staff and is therefore counterproductive.
More than 61% of NHS leaders say they cannot meet their current targets without further capital investment, and more than eight in ten say there needs to be a funding increase for social care.
The state of NHS finances
Earlier in May, the Institute for Fiscal Studies reported that real-term spending on the NHS has risen less quickly than was pledged at the last general election five years ago. A 2.4% growth per year over this parliament compares with a 3.6% average over the longer term. Higher than normal inflation has also had a negative impact, with the Department of Health and Social Care’s budget growing by less than planned and cash top-ups insufficient to offset the effects of inflation.
There has also been an unwelcome return to the raids on capital spending that were common during the late 2010s. The IFS points to a consequence of low capital spending as the escalation in deterioration of the NHS estate in England – maintenance backlog has more than doubled over the past decade, and within that, the high-risk backlog has quintupled.
In March, the Chancellor’s spending announcement for the NHS in 2024/25 resulted in an additional £2.4 billion in revenue funding, but ongoing industrial action has already cost the NHS around £3 billion in addition to loss of income from elective activity that hasn’t been delivered. Now almost 18 months into the industrial action, with further strikes announced for late June, a solution is urgently needed, although even the most optimistic would have to admit that this is unlikely to happen until after the forthcoming general election.
Solutions
NHS leaders are clear about where some of the key solutions lie. Productivity improvements are being delivered, and leaders want to do more, but this often requires capital investment, and it takes time. The NHS Confederation states that the substantial savings being demanded of NHS leaders and their staff in the space of a few months undermine attempts to address productivity issues in a strategic way, according to a plan.
“A long-term and more strategic approach to planning is urgently needed if the NHS is to move away from the ‘boom and bust’ cycle that it is experiencing,” the NHS Confederation report states. Furthermore, this short-termism represents poor value for money for taxpayers.
The NHS Confederation has also renewed calls for a long-term solution to social care. Too often the NHS is unable to discharge patients because there isn’t enough space for them in community care settings. This hinders NHS productivity as other patients cannot be treated whilst those who are medically fit to be discharged remain on wards.
Matthew Taylor, Chief Executive of the NHS Confederation says: “There is more the NHS is doing, and needs to continue to do, to improve productivity. But there are a range of factors outside of the NHS’ control that are impeding progress, including a lack of capital investment, insufficient capacity in social care and industrial action. “That’s why we are calling on the next government to invest at least another £6.4bn in capital so that the NHS has the IT, technology and infrastructure it needs to deliver long lasting improvements in productivity.”
