Trust bosses summoned to ‘get a grip’ on £7bn deficit

A letter seen by HSJ calls for trust and integrated care board chairs and CEOs to attend a meeting next week. It says NHS England is now considering a “fundamental reset” of the financial regime, just weeks ahead of the 2025-26 financial year.

The first-cut deficit, which is likely to fall substantially in the coming weeks, is on a par with the gap at the same stage in previous years but comes after NHSE’s chief finance officer called on trusts and commissioners to present realistic financial plans and not ask for “billions more”. Wes Streeting, the health and social care secretary, has declared that a “culture of routine overspending without consequences” is over.

The letter, signed by outgoing CEO Ms Pritchard and incoming “transition” chief Sir Jim, says: “We are all aware of the financial and operational challenges facing the NHS and the broader economic context we are working in. This all means that our planning for 2025-26 is especially important in developing plans that give us confidence that we will deliver on our key commitments.

“The first cut submissions made on 27 February do not meet this expectation with, like previous years, a very significant financial deficit (£6.6bn when deficit support is stripped out) and limited confidence of delivery of operational expectations.

“We cannot allow this to continue and drift into the financial year, so we have been considering a fundamental reset of the financial regime and accountability so that we can all, quickly, get a grip of this situation and give us the best chance of delivering what our population and our staff need from us.”

NHSE has provided control totals, also known as deficit support, to systems that add up to just over £2bn, HSJ understands, reflecting the size of the deficit that will be accepted. 

The letter says the aim is for leaders to leave with “clarity of expectations and confidence in delivery”. It adds that regional teams will ensure “optimum attendance” and leaders should accelerate planning and commissioning discussions in the run-up to the event.

The move follows an attempt by NHSE to reset the annual planning round after mounting criticism of the process in recent years.

Speaking at a Healthcare Financial Management Association conference in December, chief finance officer Julian Kelly told trust and ICB leaders they needed to accept that “the money is the money”.

Speaking about the 2024-25 planning round, which initially returned a first-cut £6bn deficit that eventually fell to a third of that, he said: “The first set of plans we got back, said, I needed to find another £6bn.

“I can tell you, by the end of this year, I won’t need to to have found another £6bn. So we need to get into a real conversation sooner rather than later. That also means being realistic about like the money’s the money. Now, the question then is, how do we have a realistic conversation about what can honestly be done with that money.”