The National Audit Office (NAO) has released a report on the NHS's finances.
The report found that over the decade from 2014-15 to 2023-24, the resource expenditure of the NHS grew on average by 3.2 per cent a year in real terms, which was less than the long-term average.
From 1950-51 to 2013-14, resource expenditure on health grew on average by 3.6 per cent each year in real terms. In the 10 years to 2023-24, expenditure increased by less than this and at different rates at different times.
NHS expenditure rose by 2.0 to 2.9 per cent a year in real terms from 2014-15
to 2018-19 and then rose by 4.9 per cent to 9.9 per cent a year from £136 billion in 2019-20 to £157 billion in 2021-22 (because of Covid).
Since 2022-23, NHS expenditure has fallen slightly in real terms.
The report also found that many NHS bodies failed to break even in both 2022-23 and 2023-24, although NHSE calculates that in 2023-24, after receiving additional funding from the government and re-allocating central funding, it underspent against its overall budget by an estimated £30 million (0.02 per cent).
The report states that the NHS’s financial position is worsening because of a combination of long-standing and recent issues, including failure to invest in the estate, inflationary pressures, and the cost of post-pandemic recovery.
It was pointed out that delays in HM Treasury and DHSC’s approval of NHSE’s overall budget and planning guidance have meant NHSE has not agreed NHS systems’ spending
plans until after the start of each financial year, making it very difficult for them to plan effectively.
The report concludes: "The scale of challenge facing the NHS today and foreseeable in the years ahead is unprecedented.
"While some transformation is occurring, 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."
The report recommends that DHSC, NHSE and ICSs need to intensify their efforts to manage current and future demand for healthcare by preventing more serious ill health."
It also recommends that NHSE needs to deliver on its commitments to increase NHS productivity and NHSE needs to complete its annual planning processes with ICSs well in advance of each financial year starting.
In response to the report, Saffron Cordery, deputy chief executive at NHS Providers said: "This report highlights the significant strain on NHS trusts as they continue to grapple with compounding financial pressures, including the cost of industrial action, inflation, workforce pressures and a deteriorating estate.
"Despite trusts’ best efforts to deliver record levels of activity last year, NHS productivity has struggled to rebound to pre-pandemic levels. Ever-rising demand for healthcare will also mount further pressure on the health service.
"In the face of these unprecedented financial challenges facing the NHS, trust leaders want and need to see greater emphasis on long-term investment. This includes shifting more resources into the prevention of ill health and tackling health inequalities, along with greater investment in digital technologies and infrastructure and ensuring the delivery of the NHS Long Term Workforce Plan."
