NHS financial management and sustainability

The Department and NHSE&I should redesign the financial architecture to promote the behaviours that will be needed to achieve The NHS Long Term Plan. It should draw on the lessons from previous schemes which have not worked, such as the use of punitively high interest-bearing loans to deter trusts from overspending.

As part of these wider financial reforms to establish a more stable funding system, the Department should put in place an alternative support system to provide assistance to the most financially distressed organisations, stop issuing loans where there is no realistic prospect of those loans being repaid, and restructure the balance sheets of these trusts to address the accumulated debt that will not be repaid.

The Department and NHSE&I should develop a better understanding of how much of the deficits in trusts in severe financial difficulties are down to structural issues that cannot be addressed by local health systems and develop a plan to address these structural issues and include this in any changes to payment systems.

NHSE&I should put in place a regulatory and oversight system that aligns with the responsibilities placed upon individual NHS bodies and their role within non-statutory sustainability and transformation partnerships and integrated care systems. This should clearly set out how roles and responsibilities sit between the national NHSE&I team, regional NHSE&I teams and local partnerships.