8 Accepted

The NAO reported that the mix of funding mechanisms varies between ICB areas, largely comprising...

Recommendation
The NAO reported that the mix of funding mechanisms varies between ICB areas, largely comprising a mix of historic grants and block contracts with few examples of activity-based contracts used in a strategic commissioning approach.11 Progress in moving towards strategic commissioning has been slow. NHS England explained that it is a long, complicated process of unravelling how the money is currently connected to services.12 The continued reliance on the current funding arrangements has meant there is little clarity over what ICBs are paying for or the volume of these services.13 Hospice UK highlighted the current financial pressures on the independent hospice sector and informed us that hospices raise and spend £1.2 billion a year on care, but only receive approximately £400 million in statutory funding.14
Government Response Summary
The government agrees with the committee's recommendation to address slow progress in strategic commissioning and reform funding mechanisms, with an implementation target of Autumn 2026. It plans to use the Palliative Care and End-of-Life Care Modern Service Framework (MSF) to strengthen commissioning and improve sustainability by moving away from grant and block contract models, and has already published related guidance.
Government Response
Accepted
HM Government Accepted
The government agrees with Committee’s recommendation. Target implementation date: Autumn 2026. ICBs should apply this to all providers, not just hospices, as per the Strategic Commissioning Framework. The planned publication of Autumn 2026 of Palliative Care and End-of-Life Care Modern Service Framework (MSF) provides an important opportunity to further strengthen commissioning and improve sustainability of palliative care and end‑of‑life care through consideration of contracting and commissioning arrangements. The department recognises that there is currently a mix of contracting models in the hospice sector. By supporting ICBs to commission strategically, we can move away from grant and block contract models. In the long term, this will aid sustainability and help hospices’ ability to plan ahead. The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2026. Last year, NHS England published a Strategic Commissioning Framework, supporting ICBs to respond effectively to current and future needs of their population, in line with the wider expectation of the Model ICB Blueprint. More specifically, NHS England has also published statutory guidance for palliative care and end-of-life care, as well as service specifications (adults and children and young people). The government is developing a Palliative Care and End-of-Life Care MSF, through which we will closely monitor the shift towards strategic commissioning of palliative care and end-of-life care services across all ICBs.
Addressee Bodies
HM Treasury
Timeline
Recommendation age 0.4 yrs
Report published 18 Mar 2026