Unless the chancellor makes additional funding available in the upcoming Autumn Statement, efforts to cut waiting times and make improvements to NHS services will be the casualty of the drive to plug a £1.7bn financial black hole in the NHS budget this year (2023/24).
New analysis from the Nuffield Trust think tank warns that despite an additional £450m of additional funding being made available to the NHS earlier this month, the current financial situation within the NHS is precarious with patients likely to feel the impact, with slower progress than hoped for on tackling waiting lists and initiatives to improve care quality and access stalled. The Nuffield Trust also warns that the situation could rapidly deteriorate further if more junior doctor and consultant strikes are called before the end of the financial year.
The NHS has since been forced to scale back its spending on efforts to clear record waits by reducing its target for planned care from the waiting list from 105% to 103% of pre pandemic activity levels and directing stretched financial resources towards protecting urgent and emergency care over winter. The loosening of this target is intended to encourage NHS organisations to cut back on funding extra shifts and outsourcing work to the independent sector during the remainder of this fiscal year, in the hope of returning budgets to balance by April 2024.
The overspend is a result of NHS outstripping its day-to-day budget, covering staff pay and clinical supplies, in the first half of this financial year by some estimated £3bn, and the staffing and logistical costs of strike action by NHS staff groups has overwhelmed this further.
The analysis forms part of the first instalment of the Health and Care Finance Tracker, funded by the Nuffield Foundation, which will follow the financial health of the NHS and adult social care services as we head towards the next UK general election. It reveals:
- If additional strikes by doctors to the scale seen in the first half of this fiscal year do take place, then the deficit could grow to almost £2.4bn, meaning the NHS would almost certainly need to seek additional funding in the Spring.
- If strike action remains off the table for the remainder of the financial year, NHS England estimates suggest the NHS could expect to save around £700m due to a reduced overtime and temporary staff bill, as well as through being able to make better progress on planned efficiency savings. That would bring the deficit for the year down to £1.7bn but savings beyond that are very uncertain and virtually impossible to achieve without real impacts on patients.
- There was already a £720m financial gap at the start of this financial year due to the gap between original budgeting and projected spending for local NHS systems.
In the coming weeks, local NHS systems will set out revised plans for winter and to help return to financial balance and meet high demand. Difficult decisions will be inevitable as the NHS reprioritises already stretched resources and staffing.
Nuffield Trust Senior Policy Analyst Sally Gainsbury said:
“Given the NHS budget was already overstretched at the start of this financial year, with little room to manoeuvre, it is not a surprise that the combination of long running strike action and underwhelming financial support from central government have left the NHS finances in an extremely precarious position. Without additional financial support from government, the NHS faces an uphill battle to balance its books this year without severely impacting the level and standard of care the public expect.
“Even without further strike action, the NHS is now on track to have a near £1.7bn black hole in its finances, but this could be even higher, around £2.4bn, if we see more strike action continue to the scale that we have already seen this year.
“Ultimately it is patients that feel the effects of the NHS having to tighten its belt and raiding one priority to pay for another, with efforts to tackle record waits and improve services the immediate casualty.
“In the short-term, it may be rational and sensible to point limited resources towards protecting access to urgent and emergency care over the almost certainly busy months ahead. However, more pillaging of healthcare improvement, technology, capital, and maintenance budgets, in the long run further chips away at the resilience and efficiency of hospitals and NHS services.”
Notes to Editors
- The Nuffield Trust will publish the new Health and Care Finances Tracker on 21 November here, supported and co-funded by the Nuffield Foundation as a resource to track the financial health of the NHS against spending commitments ahead of the next UK general election.
- The £450m of additional funding for NHS local systems was announced in a letter to system and trust leaders on 08 November. We estimate that £150m is new funding from the Treasury and £300m is reallocated from Department of Health budgets.
- The Nuffield Foundation is an independent charitable trust with a mission to advance social well-being. It funds research that informs social policy, primarily in Education, Welfare, and Justice. The Nuffield Foundation is the founder and co-funder of the Nuffield Council on Bioethics, the Ada Lovelace Institute and the Nuffield Family Justice Observatory. The Foundation has funded this project, but the views expressed are those of the authors and not necessarily the Foundation. Website: www.nuffieldfoundation.org Twitter: @NuffieldFound
About Nuffield Trust
- The Nuffield Trust is an independent health think tank. We aim to improve the quality of health care in the UK by providing evidence-based research and policy analysis and informing and generating debate www.nuffieldtrust.org.uk.
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