NHS leaders facing “drastic measures” to make ends meet as NHS responds to tightest financial settlement in years
Health leaders in England are calling on the next government to protect local NHS organisations from having to further cut staffing levels to make ends meet at a time when the needs of their patients are so high.
In a survey of NHS leaders across trusts, integrated care boards (ICBs) and primary care in England, some local NHS organisations are already cutting or freezing posts to balance their books. They fear local services are trapped in a cycle of short-termism where immediate cuts to meet financial targets are having to be prioritised over long term plans to improve and transform local services.
The survey was carried out during late April and early May – a time when the NHS has been coming to terms with the “flat” revenue settlement set in the Spring Budget. The NHS has been set an annual efficiency target of 2.2%, despite many organisations starting the financial year in a worse underlying state due to industrial action and other cost pressures. As the NHS Confederation survey shows, many local NHS organisations are facing much higher efficiency targets that will impact on their staffing levels.
The rate of NHS productivity growth has averaged 0.9 per cent over the past 25 years, with the NHS often delivering higher productivity improvements than the wider economy. However, the NHS leaders responding to the survey said that they need, on average, to make efficiency savings of 6% in 2024/25, with local services facing targets ranging from 1.6% all the way up to 11%.
Recently, the Institute for Fiscal Studies found that real-terms spending on the NHS had risen less quickly than was pledged at the last general election five years ago. This squeeze on NHS spending is likely to be compounded by the main political parties committing this week to no further tax increases, which the IFS say will further constrain spending on public services.
In response to this, some health leaders are having to take “drastic measures” to balance the books, with cuts to agency spending, freezing vacancies and cuts to clinical and managerial and administrative staff the most effected. This is to cover what is estimated to be a larger projected deficit in the financial plans of local integrated care systems (ICS) than has been seen in recent years. This could lead to further cuts to capital and other budgets.
Cuts to staff come at a time when the latest data shows there are over 100,000 vacancies across the NHS in England, including nearly 9,000 medical posts. This short-term risk to freeze or cut posts could be seen to go against the NHS Long Term Workforce Plan’s commitment to grow the NHS’s headcount so that it can meet the needs of patients and respond to rising demand.
The main political parties appear to agree that the NHS must grow its workforce, yet without appropriate levels of funding locally that are matched to the efficiency asks of the NHS, many health leaders feel as though they have no choice but to cut back.
An NHS trust chair said: “Our financial position is really difficult. We're expected to make very substantial efficiency savings, larger than the NHS has ever achieved, at the same time as facing extraordinary levels of demand.”
An NHS trust chief executive added: “I do not believe that it is possible for us to deliver all our financial, performance, workforce and quality/safety requirements next year – something has to give.”
The NHS Confederation’s survey found that:
- Over two thirds (67%) of respondents from NHS trusts and ICBs plan to reduce clinical staff to meet their cost saving targets and 90% plan to reduce non-clinical staff too.
- Similar figures can be seen in primary care, with three quarters (74%) of leaders saying they will reduce clinical staff and almost 8 in 10 (79%) planning to cut non-clinical staff.
- The most common ways leaders say they will balance their books is to freeze vacancies, reduce spending on agency locums or bank staff, redesign how care is delivered, and deliver services more efficiently. Progress has been seen with this already, with NHS England reporting that spending on agency staff has already been reduced by 13%.
- Some leaders say they will cut some services altogether or reduce the range of services they offer.
- Six in 10 NHS leaders say they will need top-up funding from the government within the year to have a chance of hitting their financial targets.
- Strikes have already led to more than 1.4 million appointments and procedures being cancelled at a cost to the NHS of around £3 billion. In the survey, two thirds of trust and ICB leaders said that if junior doctor industrial action continued throughout 2024 it would contribute to them not meeting their financial targets.
- Six in 10 of trust and ICB leaders say they won’t be able to meet their cost efficiency targets for this year without more capital investment. NHS England recently reported that that lack of investment in the NHS’s ageing estate has resulted in 12,000 instances over the last two years where clinical services had to stop being delivered to patients.
Health leaders want the main political parties to safeguard local NHS organisations from having to further freeze or cut clinical and non-clinical posts, especially given the task ahead in reducing waiting lists. They are recommending that the next government ensures the NHS has the resources it needs, including with at least an additional £6.4 billion of capital investment, commitment to fund the implementation of the long term workforce plan, and a similar plan to be published for social care.
Matthew Taylor, chief executive of the NHS Confederation said:
“The NHS is operating under immense financial strain, with some local services already cutting or freezing clinical and managerial posts, as well as cutting some patient services. They are facing up to some drastic measures to balance their books this year.
“While NHS leaders know they must continue to run their services as efficiently as possible, this is the tightest financial position the NHS has faced in years.
“This will not only disrupt plans to improve patient care and reduce waiting lists, but it is also forcing NHS leaders to focus on delivering immediate cuts to staffing levels and some services to achieve stringent efficiency targets over the long-term transformation of services that they want to be focusing on. We know this has already been happening in some organisations.
“This type of short-term planning hinders the NHS’s ability to plan services over the long term and it represents poor value for money for taxpayers.
“There is more the NHS is doing, and needs to continue to do, to improve productivity. But there are a range of factors outside of the NHS’ control that are impeding progress, including a lack of capital investment, insufficient capacity in social care and industrial action. That’s why we are calling on the next government to invest at least another £6.4bn in capital so that the NHS has the IT, technology and infrastructure it needs to deliver long lasting improvements in productivity.”
Echoing what other NHS leaders have highlighted in the report, one ICB leader said: “It’s hard not to be deeply frustrated with the sheer volume of time and effort this year’s planning process has taken and is still taking. The sad fact that six weeks into a new financial year, we still don't have agreed plans, leaving us with 46 weeks and counting down to achieving our plans.”
Another ICB leader said: “Don’t forget ICBs have reduced running costs by 30% already. In our case we have made 130 people redundant – 25% of our workforce. These financial pressures are forcing us to address difficult issues like fragile services. The issue is the pace at which we are expected to bring down our deficit as a system.”
Speaking about capital, a primary care leader said: “For the last few months my practice has had to use its overdraft each month to aid cash flow. Minimum wage has increased. Practice expenses have increased. Staff costs expected to rise this year and we won’t replace a nurse who is relocating. PCN practices are all constrained by finances. Planning extended access has been challenging.”
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