27 Accepted in Part

Monitor impact of integrating Service Development Funding into core funding and provide formal update.

Recommendation
While integrating Service Development Funding into core funding may offer flexibility, we believe it also introduces uncertainty around continued prioritisation and investment in these services, and could have a detrimental impact upon the progress of the transformation of services. We urge the Government and NHS England to monitor this impact, and would like a formal update on this in their response to this report. (Recommendation, Paragraph 178)
Government Response Summary
The government partially accepts the recommendation, stating NHS England already monitors relevant impacts through published data and ICBs meet the Mental Health Investment Standard. Additionally, service development funding has been secured for 2026-2029 to support growth in key mental health services.
Government Response
Accepted in Part
HM Government Accepted in Part
The government partially accepts this recommendation. Flexibility in funding arrangements can support local decision-making, but it is important that this does not undermine progress on transformation. NHS England regularly publishes data from across the mental health services dataset and the NHS Talking Therapies dataset to facilitate transparency and accountability on the transformation and delivery of mental health services. NHS England monitors relevant impacts through this data. ICBs are required to meet the Mental Health Investment Standard (MHIS) for the ICB core programme allocation. This sets a minimum level of spend on mental health services for each ICB which also reflects where funding has previously transferred from service development funding into the MHIS. In addition, service development funding has been secured for the financial years 2026 to 2027 and 2028 to 2029 to support growth in IPS, NHS Talking Therapies and MHSTs in schools and colleges.
Addressee Bodies
Department of Health and Social Care
Timeline
Recommendation age 0.7 yr
Report published 02 Dec 2025