NHS provider trusts in England are experiencing the most severe financial health deterioration in a decade, with the North West and Midlands regions recording the deepest overspends last year.
According to a new analysis by the Nuffield Trust, the sector reported a £1.2 billion overspend in 2023-24, placing it in a precarious position similar to the period immediately before the pandemic.
The Nuffield Trust's analysis, shared exclusively with the Financial Times, highlights that NHS trusts in the most deprived areas saw the worst financial deterioration in 2023-24 compared to the previous year. The underlying gap between stable incomes and outgoings across the provider sector was at least £4.5 billion.
Key Findings from the Nuffield Trust analysis include:
- Significant Overspend: NHS providers ended the 2023-24 financial year with a £1.2 billion overspend, doubling the previous year's level after modest surpluses in 2020/21 and 2021/22.
- Deep Revenue Deficits: Acute hospital trusts reported the deepest revenue deficits, with overspends of 1.2% of revenues overall. Specialist, ambulance, and mental health trust sectors experienced the steepest declines since 2019/20.
- Regional Disparities: The North West (2.2% of revenues) and the Midlands (1.5% of revenues) recorded the deepest deficits. These regions, along with the North East and Yorkshire, have seen the steepest declines in financial health since 2022/23.
- Impact on Deprived Areas: Acute hospital trusts serving the most deprived patients experienced the steepest financial declines in 2023-24, while those serving fewer deprived patients saw modest improvements.
- Worsening Situation: The latest NHS England board report revealed a £1.6 billion deficit in the trust sector by the end of December, indicating a worsening situation over the current financial year.
Sally Gainsbury, Senior Policy Analyst at Nuffield Trust, commented on the data:
“These findings reveal just how fragile the financial health of the NHS is, which should sound alarm bells over the Government’s promise of extensive reforms but with no new money to pay for them.
The Government says it wants to shift care out of hospital but also dramatically reduce waiting times. With over 6 million people on an NHS waiting list – many of them needing treatment in a hospital – it is not realistic to assume expenditure on acute hospitals can just be switched to expand other services such as community and mental health care. Those services do need to be adequately resourced, but the funding for that cannot be found by robbing Peter to pay Paul.
“Particularly concerning is the finding that NHS Trusts serving the most deprived populations have been experiencing the steepest deterioration in their financial health. It is well known that people living in poverty have poorer health, more complex conditions and die younger. A strategy that targets investment in these areas, rather than allowing it to flow away from them, is needed to reverse these worrying trends.”
While overall deficits are not as high as the record £2.2 billion shortfall in 2015/16, the current overspends are spread across almost all provider types, including acute, ambulance, and mental health trusts. This suggests a broader financial issue that policymakers must address in the forthcoming spending review.
The Nuffield Trust's findings underscore the urgent need for strategic financial interventions to stabilise the NHS provider sector and ensure sustainable healthcare delivery across England.
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