NHS Confederation responds to NAO report on NHS financial management and sustainability

Responding to the National Audit Office (NAO) report on NHS financial management and sustainability, Matthew Taylor, chief executive of the NHS Confederation, said: 

"This report by the NAO is a welcome acknowledgment of the financial needs of the NHS, not just in terms of more money, but also in terms of the way that they can use it, ultimately empowering local leaders to make the choices that are right to for their population, in consultation with patients and service-users.  

"It rightly recognises that Integrated Care Boards (ICBs) are still new and vary in maturity, which is important as we need to give them time to bed in. That’s why the NHS Confederation has called for no top-down structural reorganisation of the NHS over the current parliament to avoid an expensive and distracting upheaval in an already challenging context.  

"The report sets out that capital investment is critical to productivity. Research we published in late 2023 shows that capital investment needs to almost double to at least £14.1 billion annually over the next three-year Spending Review period if the NHS is to meets its productivity targets.  

"In the shorter-term, our members are incredibly concerned that there’s an estimated £3 billion funding gap in systems' financial plans, due to the costs of industrial action and inflation, and what NHS services have already been committed to in terms of delivery in this financial year. This must be addressed at any fiscal event in the autumn.  

"Equally, our members have long been frustrated by the lateness of the annual planning process and recognise that this has been largely determined by when the Treasury confirms the NHS’s budget for the year ahead. So, with a new administration now in office, they hope this destructive cycle will come to an end. Put simply, the earlier the NHS has the funding it needs, the more time it will have to plan.

"We’re pleased to see the report acknowledge the financial benefits of a shift to prevention-first approach to healthcare. We will be publishing a number of reports and a practical toolkit to support our members to invest in prevention in the next couple of months.

"The new government’s mission approach to health provides an opportunity to reset short-termism if it takes a truly cross-government approach that seeks to build health and not just focus on NHS policy. We were pleased to see the inclusion of the Tobacco and Vapes Bill along with the junk food advertising ban in the King’s Speech. Our members want to see the government make good on that commitment without delay."