UK Inquiry Tracker

NHS financial sustainability

Public Accounts Committee Closed Inquiry

Opened: 31 Oct 2024 Closed: 16 May 2025 Parliament page

The scale of the challenge facing the NHS is unprecedented. Local NHS systems in England ended 2023/24 with a collective deficit of £1.4bn. NHS England (NHSE) received more than £4.5bn in extra funding in 2023/24, and reduced planned spending against its central budget by £1.7bn – but these actions did … Read more The scale of the challenge facing the NHS is unprecedented. Local NHS systems in England ended 2023/24 with a collective deficit of £1.4bn. NHS England (NHSE) received more than £4.5bn in extra funding in 2023/24, and reduced planned spending against its central budget by £1.7bn – but these actions did not prevent NHS systems’ deficits significantly increasing beyond what was planned at the start of the year. The NHS may be working at the limits of a system which might break before it is again able to provide patients with care that meets standards for timeliness and accessibility, according to the National Audit Office’s (NAO) July 2024 report . The NAO has warned that, with an ageing and increasingly sick population, either much future demand for healthcare must be avoided, or the NHS will need a great deal more funding, or service levels will continue to be unacceptable and may even deteriorate further. The Committee found in 2020 that the pandemic had highlighted the need for the NHS to fundamentally transform services to ensure that it could meet rising demand in the future while maintaining vital service standards. Committee reports on NHS bodies since 2011 have highlighted a range of challenges, including rising demand, lack of capital investment, trust deficits and workforce issues. Based on the NAO report, the Committee will hear from senior Department of Health & Social Care and NHSE officials, on subjects including: - Operational improvements identified by the NAO to help the NHS do more with the resources it has; - How NHSE supports NHS bodies that are struggling; and - Longer-term challenges to the NHS’ financial sustainability. Please note that the Committee is unable to consider or assist with individual cases. If you need help with an individual problem you are having, you may wish to contact your constituency MP . Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. If you have evidence on these issues please submit it here by 23:59 on Thursday 14 November 2024. Show less

3 Recommendations

23 Conclusions

1 Report

1 Oral session

6 Letters

1 Event

Activity timeline 10 events

10 Sep
2025

Correspondence

Letter from the Permanent Secretary of the Department of Health and Social Care relating to the 5th Report of Session 2024-25, NHS financia…

4 Sep
2025

Correspondence

Letter to the Permanent Secretary of the Department for Health and Social Care relating to the Treasury Minute response follow up on NHS fi…

16 May
2025

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Fifth report from Session 2024-25

7 Apr
2025

Correspondence

Letter from the Interim Permanent Secretary of the Department of Health and Social Care relating to the delay to publication of Treasury Mi…

27 Mar
2025

Correspondence

Letter from the Interim Permanent Secretary of the Department of Health and Social Care and the Chief Executive Officer at NHS England rela…

10 Mar
2025

Correspondence

Letter from the Chief Financial Officer and Deputy Chief Executive at NHS England relating to the oral evidence session held on 25 November…

4 Feb
2025

Correspondence

Letter from the Interim Permanent Secretary of the Department of Health and Social Care relating to a follow up on the oral evidence sessio…

29 Jan
2025

Report published

5th Report - NHS financial sustainability

25 Nov
2024

Oral evidence

NHS financial sustainability

25 Nov
2024

Formal meeting (oral evidence session) · The Boothroyd Room, Portcullis House

NHS financial sustainability

Oral evidence sessions 1 session

25 Nov 2024

View on parliament.uk

NHS financial sustainability

Amanda Pritchard · NHS England Andy Brittain · Department of Health and Social Care (DHSC) Antonia Williams · HM Treasury Julian Kelly · NHS England Sir Chris Wormald KCB · Cabinet Office

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
5th Report - NHS financial sustainability	HC 350	29 Jan 2025	26	Responded

Recommendations & Conclusions

26 results

2 Conclusion Accepted

5th Report - NHS financial sustain…

DHSC and NHSE show lack of readiness for radical, long-term NHS financial transformation.

Despite having last published a plan in January 2019, and the major disruption caused by Covid to the NHS since, DHSC and NHSE are yet to recognise the scale of transformation needed to make the NHS financially sustainable. The Government’s … Read more Despite having last published a plan in January 2019, and the major disruption caused by Covid to the NHS since, DHSC and NHSE are yet to recognise the scale of transformation needed to make the NHS financially sustainable. The Government’s desire to publish a new 10- year plan is a golden opportunity to take significant decisions for the longer-term benefit of the nation’s health and the sustainability of the NHS. Yet there seems a lack of readiness amongst senior health officials to take the radical steps needed. DHSC’s and NHSE’s approach 3 to NHS finances is typified by short-termism. NHSE needed £4.5 billion in extra funding from the government in 2023–24 to deal with issues such as staff pay and industrial action. DHSC has continued to prop up day-to-day spending by raiding precious capital budgets, reallocating £0.9 billion in 2023–24. We welcome the fact that new HM Treasury rules mean it will no longer be able to do this in future. There is a confidence among the NHS’s senior leadership that in the event of a significant challenge, such as another pandemic, government would provide all the extra funding the NHS needed. It appears that no one at the top of DHSC and NHSE has been preparing the NHS for the future for example by putting together a revised strategy or plans as part of the recovery following the pandemic when it was clear that the Long Term Plan 2019 was no longer valid. The Government’s aims to shift towards prevention, community and digital are not new, with previous plans and strategies having similar objectives but often failing to deliver as intended. Officials acknowledged that these changes are difficult and should take place only slowly, over the long term, and not at the expense of patients now. Even as they write the new 10-year plan for the NHS, DHSC and NHSE have not convinced us that they are ready to give the three big shifts desired by government the priority they need. This left the impression that there was no real urgent motivat Show less

Government Response

The government welcomes the decision against capital-to-revenue switches and states record capital investment is agreed for 2025-26. It commits that every provider has been sent a bespoke pack for productivity opportunities for 2025-26, and a plan for 2026-27 will be set out after the Spending Review.

HM Treasury

NHS financial sustainability

Activity timeline 10 events

Oral evidence sessions 1 session

Reports 1 report · click to expand

Recommendations & Conclusions

DHSC and NHSE show lack of readiness for radical, long-term NHS financial transformation.

Set out detailed plan for unprecedented NHS productivity gains, addressing staff retention.

Review NHSE payment systems and processes to incentivise local systems supporting hard-to-reach patients.

Define government health prevention spending and increase flexible funding for local systems.

Ensure greater NHSE funding for community services, preventing redirection to hospitals.

Publish plans to reduce NHS paper reliance and set deadline to end fax machines.

Committee scrutinised NHS financial management and sustainability with key departments.

DHSC attributed unpredictable 2024-25 budget-setting to external shocks and high inflation.

Discrepant budget timings impede joint strategic planning between local authorities and NHS bodies.

NHS systems recorded doubled deficit despite significant additional government funding in 2023-24.

NHSE confident in future pandemic funding, but highlights workforce capacity as main concern.

DHSC consistently diverted NHS capital funds to revenue, despite new fiscal rules.

DHSC acknowledges long-term healthcare shifts but prioritises immediate acute service pressures.

NHS productivity remains below pre-pandemic levels; future targets are significantly ambitious and challenging.

Complex patient needs, longer hospital stays, and staff sickness impede NHS productivity recovery.

NHSE confident in technology for productivity gains, but current metrics inadequately measure improvements.

NHS funding mechanisms create perverse incentives, disadvantaging deprived areas for childhood vaccinations.

NHSE relies on local partners to reach harder-to-reach communities for health initiatives.

Government aims for three NHS shifts, balancing long-term transformation with current patient care.

Progress on health prevention hindered by acute care focus and reduced public health grants.

DHSC believes prevention requires cultural and legislative change, not solely additional resource allocation.

Inadequate definition and tracking of prevention spending impedes accurate assessment of policy progress.

NHSE's top-down guidance significantly hinders local health systems' intended resource allocation autonomy.

Overall NHS productivity remains low despite increased elective activity and community investments.

NHSE's needed capital investment in technology is diverted to mitigate ICB spending deficits.

NHS still lacks consistent data infrastructure and technological maturity, delaying productivity gains.

Government Response AI assessment · 25 of 3 classified

Correspondence 6 letters