5th Report - NHS financial sustainability
Select Committee
Public Accounts Committee
HC 350
29 January 2025
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Fifth report from Session 2024-25 · published 16 May 2025
Recommendations & Conclusions
5 results
10
Conclusion
Acknowledged
NHS systems recorded doubled deficit despite significant additional government funding in 2023-24.
Conclusion
NHSE received significant extra funding from the government during the course of 2023–24. This included £2.8 billion to support new pay deals for staff, and £1.7 billion to mitigate the impact of industrial action. Despite this extra money, NHS systems …
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Government Response Summary
NHS England and DHSC continue to work together to enable planning guidance to be published well in advance of the start of the financial year, and ideally before Christmas.
HM Treasury
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12
Conclusion
Acknowledged
DHSC consistently diverted NHS capital funds to revenue, despite new fiscal rules.
Conclusion
Demand for capital in the NHS continues to outstrip supply and the UK lags behind other OECD countries in terms of capital investment in its health system. DHSC has maintained its recent track record of not fully investing the capital …
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Government Response Summary
The government stated that the fiscal rules set out by the Chancellor at the Autumn Budget 2024 mean that no further capital-to-revenue transfers will be used, and the department welcomes this decision. In 2025-26, a budget of £13.6 billion for health capital investment has been agreed.
HM Treasury
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13
Conclusion
Acknowledged
DHSC acknowledges long-term healthcare shifts but prioritises immediate acute service pressures.
Conclusion
DHSC and NHSE told us that they were fully supportive of the new government’s aims to shift healthcare spending from treatment towards prevention, from hospitals to the community, and from analogue to digital. However, DHSC contended that these shifts would …
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Government Response Summary
The government states that the financial position of NHS providers is significantly improved and that the 10 Year Health Plan will consider how to build a prevention-focused health system, shift the balance of care to community settings, and maximize the impact of digital technology.
HM Treasury
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14
Conclusion
Acknowledged
NHS productivity remains below pre-pandemic levels; future targets are significantly ambitious and challenging.
Conclusion
According to official ONS measures, long-term productivity gains in the NHS averaged 0.6% a year over the period 1996–97 to 2018–19. But productivity subsequently fell, both before and during the pandemic, and has yet to recover fully. In March 2024, …
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Government Response Summary
The NHS is working hard to recover lost productivity caused by the Covid-19 pandemic, NHS productivity continues to recover and to support this NHSE are focused on increasing clinical and operational productivity, improving staff retention, technology-enabled transformation, moving care to the right setting and improving prevention and maximizing the value of our spending.
HM Treasury
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16
Conclusion
Acknowledged
NHSE confident in technology for productivity gains, but current metrics inadequately measure improvements.
Conclusion
We challenged NHSE on what it would do differently to achieve the ambitious annual productivity improvements it has committed to. NHSE told us annual productivity improvements were currently running at about 1.8% and it was confident that the annual gains …
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Government Response Summary
The NHS is working hard to recover lost productivity caused by the Covid-19 pandemic, NHS productivity continues to recover and to support this NHSE are focused on increasing clinical and operational productivity, improving staff retention, technology-enabled transformation, moving care to the right setting and improving prevention and maximizing the value of our spending.
HM Treasury
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