Chancellor Rachel Reeves must address NHS deficit at autumn statement ahead of looming winter pressures

The NHS Confederation’s CEO, Matthew Taylor, is calling on chancellor Rachel Reeves to address the mounting financial crisis in the NHS early ahead of winter, or there is a risk health leaders will have difficult decisions to make between book-balancing and staffing and service cuts.

NHS England’s last financial performance update revealed that 31 of out 42 integrated care systems have deficit plans, with a total overspend estimated to be £2.2bn for 2024/25.

The NHS Confederation is warning that this figure will only grow in light of the recent pay settlements and the GP collective action – modelling suggests that GP collective action will cost the health service around £570m.

Similarly, the pay rises for junior doctors and Agenda for Change (AfC) staff significantly supersede what had been budgeted. An extra 2% had been budgeted for AfC staff (they have been awarded 5.5%) and 8% had been budgeted for junior doctor staff (they are expected to be awarded around 22%).

A crucial first test

NHS Confederation survey results indicate that almost nine in 10 (87%) local health system leaders believe they will not be able to meet targets within current budgetary constraints.

The NHS Confederation is therefore calling for a significant portion of any new funding to be made available to NHS leaders immediately – this should include investment to boost staff and capacity in social care to support urgent an emergency care services.

“With a revenue settlement for this year that was almost flat in real terms we have no doubt that had the Conservative Government been re-elected they would have had to inject more money ahead of winter, as they had to on several other occasions,” said Matthew Taylor.

He added: “Winter will be the first big test for the new government’s management of the health service. Far better for the government to get ahead of what’s inevitable by giving the NHS the funding certainty it needs going into winter so that posts can be saved and extra capacity be lined up.

“In the past, we have seen governments come to this conclusion and provide extra funding but too late in the year for it to have an impact. The new government must avoid that this year.”

It was the middle of last September when the previous government launched a £200m winter resilience package.

£3.2bn deficit

With the pay rises expected to cost around £4.4bn and the NHS estimated by some to be tasked with finding around £1bn of that, the total deficit totals around £3.2bn. Leaders are also looking to next year’s spending review to put the NHS on more sustainable footing.

“The government must move away from flat revenue growth for the NHS and give it the long-term financial security it needs to properly plan for winter each year without relying on last minute pots of cash,” said Taylor.

He concluded: “This is on top of the capital funding needed to repair crumbling estates, replace out of date equipment and invest in the latest digital technologies.

“But in the meantime, there is no doubt that the health and care sectors will need some kind of cash injection to get through the winter. Some of this must be used to support the smooth flow of patients from ambulances at the front door of the NHS right through to their discharge back home or into social care.”

Image credit: iStock