NHS financial management and sustainability 2024 (23 July 2024)

Summary

This is the National Audit Office's (NAO's) ninth report on the financial management of the NHS in England. It's previous report published in February 2020 outlined that NHS England (NHSE) needed to carry out financial restructuring to put all NHS bodies were on a realistic path to breaking even. 

This report comes after a major change to the ways in which NHS services are funded—the Health and Care Act 2022 introduced Integrated Care Systems (ICSs) on a statutory footing. The 42 ICSs bring together NHS bodies, local government and other organisations.  

The report outlines:

• the NHS’s current financial position and operating context.
• whether NHSE’s financial management processes allow accurate and timely decision-making and support for NHS bodies that are struggling.
• the relationship between financial management and NHS performance, productivity and efficiency.
• the challenges to the NHS’s financial sustainability in the longer term.

Content

The report outlines the following conclusions about financial management and sustainability in the NHS in England:

• The scale of challenge facing the NHS today and foreseeable in the years ahead is unprecedented.
• While ICSs have resulted in some transformation, the pace of change has been slow as ICSs struggle to manage the day-to-day pressures of elective recovery following the pandemic, continual rising demand for NHS services and significant workforce and productivity issues.
• As they are statutorily required to do, NHS England and NHS systems have prioritised trying to live within their allocated funding. But, despite great in-year efforts to do so, an increasing number of NHS bodies have been unable to break even.
• The health needs of the population look set to increase and 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. 
• There is a question for policymakers to answer about the growing mismatch between demand for NHS services and the funding the NHS receives. 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.