Spending freeze imposed after NHSE identifies £300m budget hole

The government has ordered a spending freeze and told the NHS to absorb the £300m cost of the most recent resident doctors’ strikes from existing budgets, HSJ  has learned.

The Department of Health and Social Care has told all arm’s-length bodies to pause any uncommitted spending outside a small number of essential priorities, according to an internal NHS England document.

The paper reveals for the first time the estimated £300m bill for July’s industrial action, which it says “cannot be easily covered”.

It says NHSE is also preparing to impose fixed prices for commissioner-funded drugs, and offer “incentives” for local systems to spend less than planned this year, to help “support the overall NHS position”.

The NHSE paper, written by NHSE deputy chief financial officer Nicci Briggs, states: “The resident doctors’ industrial action has introduced extra challenge that cannot be easily covered within the Spending Review settlement. Initial analysis indicates that industrial action has already cost the NHS approximately £300m.

“It is in this context that the DHSC has introduced an admin or programme [resource department expenditure limit] (revenue) spending moratorium with immediate effect… [it] sets out that new, uncommitted spend cannot now go ahead unless it is considered an exception.”

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Source: HSJ, 5 September 2025