Spending Review 2025

• A significant real terms increase to the DHSC CDEL over the forthcoming spending review period will enable improvements to NHS productivity, through better-functioning facilities and increased adoption of technology. This will give trusts the flexibility they need to invest a greater proportion of resources and any surplus income to substantially reduce the maintenance backlog and to continue deliver high-quality patient care in safe and therapeutic environments.
  
  
• Improving productivity depends on the delivery and funding of the LTWP, to support staff recruitment, training and retention initiatives, to enable staff to drive productivity on the frontline, and to cut agency spending.
  
  
• The NHS needs a financial settlement that will allow it to both tackle and keep up with rising demand, and equip trusts with the resources they need to meet the challenges of the future.
  
  
• Trust leaders would welcome a long-term infrastructure programme that identifies the future needs of the NHS estate and sets out a clear plan for how the NHS estate will support delivery of the three shifts.
  
  
• Government must recognise that there will need to be a period of “double running” as the NHS continues to improve performance on key targets, while also investing more in measures to reduce demand in the future. It will take both time and resources before we see the true return on investment from preventative initiatives.
  
  
• Government must do all it can to address health inequalities, provide equitable access to services and ensure all patients receive the same level of care.
  
  
• To facilitate this, trusts would value long-term funding streams enabling them to channel sufficient investment into initiatives that will tackle health inequalities.
  
  
• To shift care closer to home the government will need to fund, and incentivise the expansion of, primary and community care capacity.
  
  
• Trust leaders want to see the government deliver a long-term, multi-year settlement to place social care on a financially sustainable footing.
  
  
• The government must ensure sufficient and sustained funding to match the growing and changing demand for mental health services. Future funding should account for changes in mental health prevalence, service demand, and the impact of transforming care models. The imbalance in resource allocation between mental and physical health should be addressed.

Our submission to HM Treasury ahead of the forthcoming Spending Review (SR) aims to outline how government and trust leaders can work in partnership to deliver their shared ambitions for the health service. This submission will focus on two shared challenges that must be contended with in order to build an NHS fit for the future. These challenges are:

1. Improving productivity to deliver value for money
2. Implementing the three shifts to meet the changing needs of the population

Our submission will focus on the key enablers that will help transform the NHS into the health service that government, trusts, and crucially, patients, can be proud of. Our submission will also set out how the provider sector is uniquely placed to support the government in its ambitions for the NHS. 

This submission is made on behalf of all trusts and foundation trusts in England, and has been informed through extensive contact with trust leaders and numerous NHS Providers surveys.

What are the key challenges facing the NHS?

Operational performance

While the NHS has largely succeeded in reducing the longest waits for care, the overall size of the waiting list has not reduced significantly. As of November 2024, the waiting list for elective care was 7.48 million cases, involving approximately 6.28 million individual patients (NHS Providers, 2024f). Long waits persist, with around 3.06 million patients waiting over 18 weeks for treatment, and 220,000 patients waiting over a year (NHS Providers, 2024f). 

This winter, accident and emergency (A&E) departments have faced extremely high demand, and as a result the proportion of patients spending more than four hours in A&E has grown significantly.
Overcrowding has also led to delays in ambulance service response times. December data confirms that 2024 was the busiest year on record for A&E attendances (27.4 million). In total, ambulances were called out to 8.94 million incidents over the course of 2024 – over half a million more than the equivalent figure for 2023. (NHSE, 2025). 

The waiting list for community services is still at around 1 million cases. In our May 2024 survey of trusts providing services for children and young people (CYP), 82% of respondents told us that their trust is not able to meet current demand (NHS Providers, 2024b). Demand for mental health services continues to be significantly higher than pre-pandemic levels, with 450,180 referrals in November 2024 alone, over 37% higher than November 2019 (NHS Digital, 2025).

Overall, the NHS continues to face significant operational challenges, particularly in managing care backlogs and meeting demand during peak periods. The data shows that demand for NHS services continues to rise year-on-year – this is true for elective and urgent and emergency care, but critically also for community and mental health services.

Financial performance

As the National Audit Office’s July 2024 report on the financial sustainability of the NHS makes clear, trusts have faced significant financial challenges that have hindered their ability to meet operational priorities within agreed budgets (NAO, 2024). Persistently high levels of inflation in recent years have also substantially impacted the NHS's financial performance, with rising costs for medical supplies, energy, and other essential services. NHS England has estimated that the differential between actual inflation levels and the assumptions underpinning financial allocations has created an unfunded pressure of £1.7bn (NHSE, 2024a). Industrial action from NHS staff groups has also had a material financial impact on the NHS, costing an estimated £2.4 billion in 2023/24 (NHSE, 2024b). 

As a result of these pressures, the NHS has had to make unprecedented efficiency savings each year. During 2023/24 trusts and systems delivered £7.2bn of savings, and have been tasked with delivering £9.3bn of savings this year (NHSE, 2024c).

Recovering productivity

The pandemic significantly disrupted the NHS, worsening existing challenges. The most recent data published by the Office for National Statistics shows that quality-adjusted healthcare productivity was 6.6% lower in 2021/22 than in 2019/20 (ONS, 2024). NHS England estimates that acute sector productivity in 2023/24 was approximately 11% lower than pre-pandemic levels (NHSE, 2024d). The Institute for Fiscal Studies found that despite the NHS having more staff and more resources than it did before the pandemic, there has not been a corresponding increase in activity levels (Warner & Zaranko, 2023).

However, this trend has begun to reverse. Overall acute sector productivity improved by 1.8% in the first half of 2024/25 compared to the same period last year (NHSE, 2024e), as hospitals delivered 5.7% more activity (cost-weighted) while real-term costs increased by 3.9%. This maintained the productivity improvement of approximately 2% between 2022/23 and 2023/24 (NHSE, 2024e). 

Despite these improvements, NHS productivity has not yet returned to pre-pandemic levels. Persistent Covid-19-related costs, higher patient acuity, an aging NHS estate,, limited community and social care capacity, and increased staff sickness continue to impact productivity.

What are the government’s ambitions for the health service?

In December 2024, government published its Plan for Change, which set out six milestones to help mark progress on the government’s missions. Over the course of this parliament, the government’s health milestone is to ensure that 92% of patients in England would wait no longer than 18 weeks for elective treatment (HM Government, 2024). In January 2025, NHS England published a new national plan to reform elective care for patients which sets out how the health service will meet this milestone by March 2029 (NHSE, 2025). 

The Plan for Change also highlights three shifts that will help reform the NHS and support delivery of the government’s health mission (HM Government, 2024). These three shifts are as follows:

1. Moving care from hospitals to communities (hospital to community)
2. Making better use of technology (analogue to digital)
3. Focussing on preventing sickness, not just treating it (sickness to prevention)

Trust leaders have acknowledged that a portion of the current productivity gap is within the gift of trusts to influence and control. They are committed to doing all that they can to improve NHS productivity and achieve the best value for money for taxpayers. However, to improve productivity sustainably, there are a number of long-term enablers that will be key to unlocking substantial savings and improving value for money. These are:

• Transforming NHS facilities

• Reforming the NHS capital regime

   

• Governance and accountability to support productivity

• Prioritising and supporting NHS staff

We provide further detail on each of these enablers below. The comprehensive spending review must seriously consider these if it is to bring about a sustainable increase in NHS productivity.

Transforming NHS facilities

In our June 2024 survey of trust chief executives and finance directors, 90% of respondents said the level of operational capital available to their organisation was insufficient (NHS Providers, 2024c). Trust leaders have consistently reported that the level of capital resource available is not close to matching the level of infrastructure need across their estates. The NHS maintenance backlog has been steadily rising over the last decade, now standing at £13.8bn according to the estates return information collection (ERIC) data for 2023/24 (NHS Digital, 2024b).

Trusts are currently managing significant levels of risk across their estates, with the total cost to eradicate the proportion of the backlog categorised as ‘high risk’ now £2.7bn – over seven times higher than the equivalent figure for 2013/14 (NHS Digital, 2024b). Trust leaders are concerned that estates-related issues are having a significant impact on their ability to provide a positive environment for both staff and patients. The £3.1bn uplift to the DHSC capital budget for 2025/26 was a welcome step in the right direction and will support trusts to halt the deterioration of the NHS estate.

Estates-related issues also impact trusts’ ability to improve productivity, with medical procedures often being disrupted, postponed or cancelled due to faulty equipment or safety hazards. In January 2025, the NAO published its report on the extent and impact of the maintenance backlog across the public sector. One of the report’s key findings was that building failures across the public sector estate “has affected the delivery of public services, government’s productivity and its ability to withstand shocks” (NAO, 2025). 

In a May 2024 survey of trust chief executives and finance directors, 57% of respondents stated that estate related issues were severely or significantly impacting their ability to deliver improved productivity levels (NHS Providers, 2024g). There are also particular challenges for mental health trusts operating in often outdated buildings which do not provide suitable therapeutic environments for patients accessing mental health services. In November 2021, the Health and Social Care Committee’s (HSCC) Expert Panel outlined that a lack of capital funding had contributed to the limited therapeutic offer for mental health inpatient services (HSCC, 2021). Furthermore, the maintenance backlog for mental health trusts surpassed £1bn in 2023/24 (NHS Digital, 2024b), highlighting the continued deterioration across the mental health estate and the extent to which facilities need to be modernised to be fit for 21st century care.

One of the three strategic shifts required to build an NHS fit for the future is harnessing the power of technology to support the modernisation of the NHS. Trust leaders are acutely aware of the transformational benefits of technology and how this could shape the future delivery of healthcare. However, limited operational capital budgets in recent years have also inhibited trusts’ ability to invest in improving the use of technology and digital assets.

In our Digital Transformation report, published in October 2024, trust leaders identified funding and financial constraints as the biggest barrier to the progression of digital transformation (NHS Providers, 2024d). Digital technologies have the ability to completely transform how patients experience the NHS as well as improving the way care is delivered, for example, by offering virtual appointments or liaising with clinicians using patient engagement platforms. In order to ensure the NHS can continue to make better use of technology, it is vital that spending on digital technologies is increased and protected from being diverted to cover day-to-day spending pressures. 

A significant real terms increase to the DHSC CDEL over the forthcoming spending review period will enable improvements to NHS productivity, through better-functioning facilities and increased adoption of technology. This will give trusts the flexibility they need to invest a greater proportion of resources and any surplus income to substantially reduce the maintenance backlog and to continue deliver high-quality patient care in safe and therapeutic environments.

Reforming the NHS capital regime

Lord Darzi’s 2024 review outlined that the NHS capital regime “is widely recognised to be dysfunctional” (Darzi, 2024). Trust leaders have continually raised that the current capital regime is not working effectively. Very often capital spending is backloaded to the end of the year, with pots of strategic capital funding becoming available at short notice. This results in inefficient spending decisions being taken in order to avoid capital budgets being underspent but does not always enable the right investment at the right time. As such, it represents poor value for money for taxpayers. 

Following the establishment of integrated care systems (ICSs), capital envelopes are now held and managed at the system level, with ICBs having a key role in operational capital planning and the prioritisation of capital across local systems. This system-based approach to capital planning has a significant impact on trusts operating across several ICSs – for example ambulance trusts and providers of specialised services. Often such trusts do not receive capital allocations proportionate to the size of their trust or the volume of patients they treat each year, making it particularly difficult to run, maintain and upgrade their facilities.

Furthermore, as operational capital allocations are informed by the value of facilities and depreciation costs across the NHS estate, and in the context of a constrained overall capital envelope, short-term investment tends to be prioritised over longer-term strategic investment. Effectively this means that the management of the existing estate has taken precedence over the potential investment in new facilities or technologies that will improve patient care. While reducing the maintenance backlog is essential to ensuring existing facilities can be used as productively as possible, transforming estates and investing in next generation technology or equipment, can create a step change in productivity and value. However existing capital constraints are currently limiting the NHS’s ability to realise this potential. 

The government should carry out a wholesale review of the NHS capital regime and design a new approach enabling the effective prioritisation of resources so trusts from all sectors can access the capital investment they need.

Governance and accountability to support productivity

The government has committed to reforming public services, including health and care, to ensure they continue to meet the needs of the public. Trust leaders want to see a health and care system that delivers on what is most important to patients – improved access to care, and better health outcomes. Therefore, it is vital that the financial framework is robustly designed to support efforts to achieve this aim. Trusts recognise the work to improve the NHS operating model could help with this. 

Improving productivity will require clarity and focus, and all parts of the health and care system pulling in the same direction. There must be clear roles and responsibilities for each constituent part of the health system – including trusts, integrated care boards, NHS England regional and national levels. Trust leaders recognise that work is underway to set this out, but the current lack of clarity is leading to duplication of activity and precious time being wasted on unproductive and burdensome activity. The NHS is responsible for significant sums of public money and it will always be vital that decisions over how that money is spent are taken robustly. The role of unitary boards at trust level, with appropriate autonomy and accountability, is designed to support this. 

The move to greater system working, including working in partnership with local government and voluntary, community and social enterprise (VCSE) organisations, opens up a wealth of opportunities to collectively improve the productivity of the health service. By embedding more formalised ways of joint working and collaboration, this will help support the government’s ambition to shift more care from hospital to community settings by streamlining and improving patients’ interactions with different organisations.

Providing trust leaders with greater autonomy to make investment decisions that will support the achievement of the government’s ambitions for the health service and deliver better outcomes for the communities they serve would be a positive step.

Prioritise and support NHS staff

At the heart of efforts to improve NHS productivity are staff. Trust leaders agree with NHS England’s assessment that “recovering productivity is categorically not about staff working harder” (NHS England, 2023). However, further productivity gains will be hugely challenging unless NHS leaders are supported in addressing the increased prevalence of staff burnout and low morale across the NHS workforce. In our State of the Provider Sector report, published in November 2024, 75% of trust leaders were extremely or moderately concerned about the current level of burnout across their workforce and 78% were equally concerned about the morale of staff (NHS Providers, 2024a).

A combination of relentless operational pressures and a workforce with lower morale can have an adverse impact on the discretionary effort that staff are willing to make – something which the NHS has historically been reliant on. To combat this, the importance of prioritising staff wellbeing cannot be overstated. The NHS Long-Term Workforce Plan (LTWP) and the Equality, Diversity and Inclusion Improvement Plan, both published in 2023, place significant emphasis on embedding compassionate and inclusive workplace cultures which will improve the operational environment for staff. Our Providers Deliver: enabling wellbeing within trusts outlines a series of steps taken by trusts to respond to national data on staff burnout and morale and invest in interventions to support their physical and mental wellbeing (NHS Providers, 2023). Trusts are already working hard to improve staff wellbeing and retention. The impact of burnout and low morale on the service’s ability to recover performance and productivity levels is significant and trusts need the support of government to prioritise staff wellbeing initiatives.

The LTWP and its focus on ensuring the NHS has an established pipeline to manage future demand levels, improving staff wellbeing and retaining current staff, was warmly welcomed by trust leaders. The plan recognised that improvements to productivity and a well-resourced workforce are intrinsically linked (NHSE, 2023). However, due to extensive financial pressures trusts have worked tirelessly to consolidate workforce growth and reduce the NHS’ reliance on temporary staff support. Trusts have significantly reduced spending on temporary staff, with agency staff spending now at its lowest point (as a percentage of total pay) since 2017 – an overall reduction of £1.3bn since 2022/23 (NHSE, 2024c).

Despite the positive work carried out by trusts in recent years to control staff costs, many trust leaders have expressed concern that their organisations do not currently have the right numbers, quality and mix of staff to deliver the high quality care that patients deserve (NHS Providers, 2024a). The focus on controlling workforce growth and the unprecedented levels of efficiency savings required in recent years, means trust leaders have understandably questioned whether this is in line with the ambitions of the LTWP to ensure the NHS has the staff it needs to meet the challenges of the future. The LTWP is yet to be funded for the duration of its 15-year term, and to date has only received £2.4bn to fund additional domestic training places up to 2028/29. Improving productivity depends on the delivery and funding of the LTWP, to support staff recruitment, training and retention initiatives, to enable staff to drive productivity on the frontline, and to cut agency spending.

As outlined above, the government’s Plan for Change specified three key shifts that will underpin the 10 Year Health Plan and are necessary to create a modern health service that will meet the changing needs of the population (HM Government, 2024). These shifts are as follows:

1. Moving care from hospitals to communities: People are now living longer than ever before, often while managing more complex health conditions. Shifting more care to community settings should not only be more cost-effective but will also support patients to receive care closer to home and lead more independent lives.
2. Making better use of technology: Technology has the potential to transform the way patients access care and experience the NHS, as well as delivering huge productivity benefits.
3. Focusing on preventing sickness, not just treating it: As Lord Darzi’s report suggests, interventions that prevent ill health will be considerably less expensive than treating the consequences of ill health (Darzi, 2024).

We recommend government considers how each of the below enablers will support the implementation of the three shifts and take steps at the forthcoming comprehensive spending review to deliver the resources required to enable transformational change.

• Returning the NHS to financial sustainability

• Future-proofing the NHS estate

• Preventing ill health and tackling health inequalities

• Ensuring people receive care in the right place at the right time

   

• Placing social care on a sustainable footing

• Delivering parity of esteem between mental and physical health

Return the NHS to financial sustainability

Trust leaders are united in their determination to deliver high value care for patients, service users and taxpayers. Long-term financial sustainability is essential to support efforts to build a health service fit for the future. Trust leaders welcomed the funding uplift provided to the health service at the Autumn Budget on 30 October 2024, which represented average real terms revenue funding growth of 4%, the highest since 2010 (excluding funding settlements covering the years of the Covid-19 pandemic).

However, as the independent investigation led by Lord Darzi recognises, this follows “the most austere decade since the NHS was founded in 1948” (Darzi, 2024). Analysis from the Health Foundation has found that sustained improvement in NHS performance, with a focus on prevention and shifting more care out of hospitals, will require 4% revenue funding growth throughout the forthcoming spending review period (Health Foundation, 2024). Trust leaders share the government’s vision for an improved NHS that delivers for patients, but without long-term financial sustainability it will be difficult to have the necessary strategic focus to deliver an ambitious programme of transformation. The NHS needs a financial settlement that will allow it to both tackle and keep up with rising demand, and equip trusts with the resources they need to meet the challenges of the future.

Trust leaders welcomed the government’s October budget announcements to improve the current fiscal framework, including holding regular spending reviews, as well as setting five-year capital budgets. This should give greater certainty over the medium term and will help them avoid short- term decision-making, which can often be detrimental to ambitions to improve both the quality and efficiency of the health service. It is also in keeping with recommendations from the National Audit Office, that the government should explore how to deploy health funding on longer timeframes (NAO, 2024).

Trust leaders have shared that one of the biggest challenges facing ICSs was a lack of long-term strategic focus – 62% of respondents to our State of the Provider Sector survey felt that longer-term planning cycles would support them in their role as trust leaders (NHS Providers, 2024a). Short-term planning cycles and an annual focus on delivering short-term efficiency savings will distract from efforts to deliver a sustainable health service that is fit for the future. Trusts and their system partners will need time, space and support to tackle the root causes of financial issues.

Future-proofing the NHS estate

Lord Darzi’s recent review concluded that the “NHS has been starved of capital”, emphasising the need for increased and sustained funding in infrastructure and technology to help the NHS meet current and future healthcare demands (Darzi, 2024). Government’s ambition to implement the three shifts will require a different approach to the NHS estate. If more care is to be provided in community settings, and more ill health is to be prevented, then the requirements for the NHS estate are likely to change. At present too much of the NHS estate is stuck in the 20th century, with 42% of NHS facilities built before 1985 and 14% predating the NHS’ establishment in 1948 (UK Parliament, 2024).

This aging infrastructure poses significant challenges to trusts in meeting modern healthcare standards or developing the 21st century services that trust leaders and the government are committed to. Part of the reason for this is the combination of an aging estate and limited operational capital budgets, which together often force trusts to prioritise maintenance work over longer-term strategic investment. Trust leaders would welcome a long-term infrastructure programme that identifies the future needs of the NHS estate and sets out a clear plan for how the NHS estate will support delivery of the three shifts.

Trust leaders involved in the New Hospital Programme (NHP) were bitterly disappointed at the outcome of the government’s review of the programme, which delayed many schemes beyond 2030. Although they welcomed the government’s approach to be upfront and honest about when they can realistically expect to begin construction, the announcement understandably caused significant frustration. Many of the hospitals involved in the programme are increasingly becoming dilapidated and some trusts are concerned that their current estates will not be suitable environments for patient care, before replacement hospitals will be completed. 

In the meantime, NHP trusts are spending significant sums every year maintaining facilities that are fundamentally unsuitable and in need of replacement. Government and national bodies must work with NHP trusts to identify areas where there is significant infrastructure risk and work in partnership to develop solutions that will prioritise the safety of both patients and staff. This includes replacing reinforced autoclaved aerated concrete (RAAC) and confirming the total funding envelope for Wave 1 schemes.

Over 100 applications were made from trusts for the final eight spots in the New Hospital Programme (NHP), highlighting the widespread urgent need for capital investment to upgrade facilities across the NHS estate (NAO, 2023). Given the focus of the NHP on largely acute services, and the prioritisation given to recovering elective and emergency care performance, mental health, community and ambulance trust leaders are particularly concerned about a lack of parity for investment in their estates. It is vital that government strategically invests in expanding community care capacity to facilitate the growth in demand for community services expected from shifting more care out of hospital and inpatient settings Community providers also need adequate digital infrastructure to integrate further with partners in primary care and social care and foster greater joined-up working.

Ambulance trusts face similar challenges with their estates and digital infrastructure. Their services are often based in buildings which absorb a significant portion of trusts’ capital budgets to maintain. There is an opportunity cost here: trusts’ capital budgets could be spent on digital transformation projects or fleet upgrades to unlock further productivity gains. Community and ambulance providers are doing their best to prioritise investment in emerging digital technologies, such as virtual appointments and patient engagement platforms that will improve the integration of services and support the left shift to community. However, their efforts are often stifled by insufficient capital funding envelopes. Government must ensure access to capital funding for ambulance, community, specialist and mental health services is widened so trusts can continue to support the government’s aim to deliver more high-quality, integrated care in community settings.

The introduction of system capital limits has constrained trusts’ ability to invest in their estates. Although the balance sheet position is mixed across the country, many providers have reserves generated by efficiency in previous years, which system capital restrictions prevent them from re- investing. Not only does this choke investment but it erodes an incentive for trusts to drive productivity. Trusts need greater flexibility to invest in their own estate without breaching their system’s capital resource limit. For example, consideration should be given as to whether to exclude certain types of expenditure (e.g. retained surpluses, commercially driven investment, proceeds from land disposal) from counting against system capital spending limits. Trust leaders are also keen to work with government to explore the effectiveness of alternative routes to strategic capital funding, such as private investment. The government should review how capital is allocated, including alternative sources of capital, to ensure there is a sufficient pipeline of investment to support transformational capital projects.

Preventing ill health and tackling health inequalities

Trust leaders have welcomed the government’s renewed focus on preventing the causes of ill health as one of the three shifts underpinning its 10 Year Plan for Health. Trusts are a vital partner for government in supporting an approach which prevents ill health, tackles health inequalities and prioritises the health and wellbeing of the whole population. One of the biggest barriers to facilitating this shift has been the lack of dedicated funding or resources to support prevention. In a May 2024 NHS Providers survey of trust chief executives and finance directors, 94% of respondents reported that they do not have sufficient funding to invest in prevention and 85% felt that they did not have sufficient resources to tackle health inequalities (NHS Providers, 2024e). Government must recognise that there will need to be a period of “double running” as the NHS continues to improve performance on key targets, while also investing more in measures to reduce demand in the future. It will take both time and resources before we see the true return on investment from preventative initiatives.

The government is rightly focused on improving NHS performance and reducing the waiting times. This commitment must also reduce inequalities in access to care, outcomes and experience. Evidence suggests that disparities continue to widen. For example, women living in the most deprived areas are twice as likely to die during pregnancy, and black women are four times as likely to die during pregnancy compared to white women (MBRRACE-UK, 2023). Covid-19 also highlighted stark inequalities by ethnicity, with the mortality rate for black men being 3.3 times higher than for white men in the early phases of the pandemic (ONS, 2020). The evidence suggests that patients from ethnic minority groups too often have different experiences and outcomes when accessing care. 

Government must do all it can to address health inequalities, provide equitable access to services and ensure all patients receive the same level of care. It is possible to both achieve key operational priorities and embed a culture of tackling health inequalities as business as usual – for example, trust leaders would advocate an inclusive approach to recovering care backlogs. More can be done to align the government’s priorities for the health service with a targeted approach to tackling health inequalities to ensure the overall health of the population can be improved. To facilitate this, trusts would value long-term funding streams enabling them to channel sufficient investment into initiatives that will tackle health inequalities. 

Cross-government action is required to promote health and wellbeing, and trusts play a critical role in delivering a model of care that focuses on the prevention. However, the NHS cannot improve population health by acting alone: many of the determinants of ill health are societal, such as poverty, poor housing, unemployment, poor educational outcomes, and structural racism. Collaboration between public bodies via system working and devolution offers the opportunity to tackle these factors more effectively. The public health grant is a vital element in this. It has historically played an important role in targeting investment in schemes and initiatives to promote the health and wellbeing of the wider population, but in particular, children and young people. Government’s announcement of a 5.4% uplift (equivalent to £200m) to the public health grant is welcome and must be maintained, in order to reverse the strain that significant cuts to public health budgets have placed on NHS services.

Ensuring people receive care in the right place at the right time

In our November 2024 State of the Provider Sector survey, 98% of trust leaders supported the government’s ambition to shift more care away from hospitals, into the community, and closer to home (NHS Providers, 2024a). But much of the focus on the performance of the health service has historically been, and continues to be, concentrated on the performance of acute services (including urgent and emergency care and elective care). Lord Darzi’s report highlighted that between 2006 and 2022, the proportion of the total NHS budget spent on hospitals increased from 47% to 58% (Darzi, 2024).

Despite the importance of treating people in the right place at the right time, funding for community, primary care and mental health services has failed to keep pace with the rise in demand for care. Lord Darzi’s report states that “Too many people end up in hospital, because too little is spent in the community” (Darzi, 2024). Investment in upstream services will help to enable long-term conditions to be managed effectively at home to prevent any further deterioration or escalation of care needs. There is significant evidence to suggest that for patients with frailty, hospital admissions can often cause more harm than good – reducing their independence when returning home and potentially risking contraction of hospital-acquired infections. The government should therefore explore how to divert more resources into initiatives that will reduce the number of patients requiring hospital admission and enable them to stay well at home. To shift care closer to home the government will need to fund, and incentivise the expansion of, primary and community care capacity. 

Ambulance services are crucial in reducing the pressure on hospitals and ensuring people receive care in the right place at the right time. Although ambulance services will continue to play a pivotal role in urgent and emergency care (UEC) pathways, they also meet a significant proportion of urgent care needs in out-of-hospital environments, often preventing the escalation of care to hospital settings. To support the shift towards greater levels of care in the community, ambulance services could play a pivotal role in offering more direct referral pathways to community services and keeping patients both safe in less intensive settings.

Our Providers Deliver: achieving value for money report outlines a case study where an ambulance service offered video consultations to patients contacting the trust’s NHS 111 service. As well as feedback from patients being overwhelmingly positive, this initiative has supported patients getting the right level of care much sooner. Patients who were triaged using video consultation were 14% more likely to continue their treatment at home than patients who were triaged without video consultation. As this example successfully demonstrates, ambulance services will be integral to the government’s ambition to shift more care out of hospital and into the community. Government should review the role of the ambulance sector in supporting the shift to greater community-based care and ensure it is sufficiently resourced to continue providing high-quality urgent care.

Delivering parity of esteem between mental and physical health

As outlined by a King’s Fund report published in February 2024, funding for mental health services has not kept pace with the recent surge in demand since the pandemic (King’s Fund, 2024). Demand for mental health services has grown significantly, with referrals up by 37% when comparing November 2024 with November 2019 (NHS Digital, 2025). Between 2016/17 and 2022/23, the total NHS spend on mental health has only increased by 8% in real terms (BMA, 2024). The impact of growing and often more complex demand for mental health inpatient care has been a key issue contributing to financial pressures for the sector (NHS Providers, 2021). In a June 2024 survey of trust chief executives and finance directors, four in five trusts (81%) reported insufficient funding to sustainably reduce mental health service backlogs. Only 8% of respondents were confident in their system's ability to meet recovery targets for mental health services compared to physical health. Lord Darzi's report highlights the need for better financial flows to support community-based care and notes the disparity in resource allocation between mental and physical health, with mental health receiving less than 10% of NHS expenditure despite accounting for over 20% of the disease burden (Darzi, 2024). 

Trusts recognise the crucial value the Mental Health Investment Standard (MHIS) has in ensuring a growing share of NHS spending on mental health services, which has supported significant expansion and transformation of services. However, despite the safeguard of MHIS, there is still significant unmet need, and concerns remain about whether overall funding levels are enough, and whether mental health services are being appropriately prioritised locally or nationally. The standard should not be viewed as a maximum limit based on affordability – it is better understood as a minimum, to avoid widening the gap between resource and need. Effective and transparent mechanisms are needed to guarantee sufficient funding reaches the mental health services that need it most. Investing in high- quality, accessible mental health services can reduce healthcare costs, improve productivity, and lead to better health outcomes for patients. The government must ensure sufficient and sustained funding to match the growing and changing demand for mental health services. Future funding should account for changes in mental health prevalence, service demand, and the impact of transforming care models. The imbalance in resource allocation between mental and physical health should be addressed.

Placing social care on a sustainable footing

Our State of the Provider Sector survey invited trust leaders to highlight the greatest risks to the provision of high quality patient care over winter. The top two risks as chosen by trust leaders were delayed discharges (57%) and social care capacity (49%) (NHS Providers, 2024a) – these are also significant barriers to improving productivity. In January 2025, on average there were 23,398 patients each day who no longer met the criteria to reside, placing additional strain on bed capacity and the flow of patients from admission into hospital, into out-of-hospital care (NHSE, 2025). Research conducted by the Nuffield Trust highlights that the most frequent reason for delays to patients being discharged from hospital was waiting for further support packages to be made available at home – typically organised either by NHS community services or adult social care (Nuffield Trust, 2023). While much can be improved by better integrating transfers between NHS settings, trusts are concerned about the lack of capacity in the social care sector causing delays to social care assessments, which in turn limits trusts’ ability to free up bed capacity and lengthens patients’ stay in hospitals. Trusts will continue to work hard to streamline discharge procedures and ensure patients spend less time than they need to in acute care settings, however, government must recognise that the lack of capacity across social care is a key contributor to the productivity challenge.

Social care plays an integral role in keeping patients healthy at home, managing long-term conditions and investing in the prevention of ill health and other early intervention initiatives. Trust leaders are increasingly concerned about the financial challenges facing local government which will undoubtedly pose significant risk to the provision of social care services. The Association of Directors of Adult Social Services (ADASS) have stated that their members do not feel confident that their budgets will be sufficient to meet their statutory duties (ADASS, 2024). The sector has seen a significant rise in demand over recent years as well as a similar increase in the acuity of need which has resulted in more people requiring more intensive care and support. This presents obvious challenges for constrained budgets, but the volume of demand and resultant financial pressures also result in social care providers having insufficient resources to direct additional funding towards early intervention schemes and preventative support. If the future delivery of healthcare will be increasingly focused on delivering out of hospital care in neighbourhoods, then its success will depend on a robust social care sector. Trust leaders want to see the government deliver a long-term, multi-year settlement to place social care on a financially sustainable footing.