A greater challenge for 2026/27

While local NHS leaders head into 2026/27 on the back of significant gains from 2025/26, they indicated in our survey that this year is likely to be even harder. 97 per cent of trust and ICB respondents said the scale of the financial challenge would be at least the same as 2025/26, if not larger. All respondents to our GP survey said this would be case. In addition, nearly nine in ten (86 per cent) of trust and ICB respondents believe their cost improvement plan (CIP) will be more difficult to deliver in 2026/27 than 2025/26.

Around 95 per cent of mental health leaders who responded said they were concerned about increasing demand for mental health care, and 78 per cent said they were worried about meeting financial targets this year. There were particular concerns about community mental health services. One mental health leader pointed to a lack of “investment for mental health community services [and] teams under-resourced to manage the increase in demand.”

These findings were echoed in our interviews with finance directors. While most suggested that the level of savings required this year will be similar to 2025/26, delivering them will be much more challenging. Some also questioned whether it is realistic and sustainable to expect the NHS to make efficiency savings of this magnitude year-on-year.

Amid a flurry of recent policy changes to the financial framework for 2026/27, including work to deconstruct block contracts and a watering down of the Mental Health Investment Standard, a number of trust leaders reported that their financial allocations would be materially lower in real terms than in 2025/26. 

This was particularly prominent in discussions with mental health leaders, who shared concerns that the lack of growth in mental health funding indicates that mental health is not being sufficiently prioritised. This will add further pressure to trusts’ ability to deliver challenging financial plans and leaves little scope for growth or ambition beyond maintaining core services.