The NHS and the ‘uncertainty paradox’

The paradox of uncertainty suggests that change is the only constant — a concept that the NHS is familiar with and receives no respite from.

The Spring Statement was quiet on health spending. However, the tables tucked at the back of the document reveal some adjustments to the Department of Health and Social Care (DHSC) allocation for 2024/25, including an additional £3bn compared to the Autumn Budget, and a further £1.5bn earmarked for 2025/26.

Changes to the current year were expected; the supplementary estimate outlined transfers from other departments, a call on the reserve to cover ‘pressures which could not be absorbed’ and yet another capital-to-revenue transfer. I’d speculate that the increase for 2025/26 at least in part, relates to cover for the imminent rise in employer NICs, but this remains uncertain. 

In-year shifts are understandable, and funding is welcome. But recent years have seen a growing trend of in-year allocations to cover cost pressures. These frequent adjustments create uncertainty, which, as CIPFA has highlighted previously, is problematic for those setting financial plans. With no clear sight available resources, it feels like a crystal ball is needed to determine the year-end position.

The uncertainty of discourse

I’m sure those in the NHS breathed a sigh of relief that the Spring Statement was relatively quiet. There’s been plenty of noise recently, on top of the huge operational and financial challenges they face.

In early March, this noise reached a crescendo. The leadership team of NHS England began to signal their departure. Initial system plans for 2025/26 suggested a £6.6bn deficit position, spurring a ‘fundamental reset’. Integrated care boards (ICB)s were told to halve their running costs and Trusts were instructed to reduce corporate service spending. This was followed by the announcement on the abolition of NHS England. All of this arrived with few details, creating widespread uncertainty and anxiety!

Centralising NHS England’s functions into DHSC to reduce bureaucracy and duplication is difficult to argue against, especially if it releases funding to the frontline. However, there is no clear picture of what the ‘new centre’ will look like. There is a ‘transition team’, but it's uncertain exactly what we are transitioning to. In CIPFA’s response to the abolishment of NHS England, we highlighted the opportunity to increase local autonomy and accountability bringing us to the local landscape.

Uncertainty at the local level

The 50% reduction to ICB running costs comes hot on the heels of a 30% reduction over the last two years, and during a time when their function is uncertain. Early clues point to less provider oversight and more of a ‘strategic commissioner’ role. However, more uncertainty remains, as the strategic commissioning framework clarifying this is not yet published. As the cuts take effect, it’s likely that some ICBs will begin to ‘merge’. Similarly, the reduction in Trust’s corporate service budgets may lead to more ‘group’ structures. All of this is happening against the backdrop of the local government devolution agenda, further complicating an already uncertain local landscape.

One driver for these changes is to shift funding to the frontline, but the uncertainty looms. The outgoing CFO of NHS England suggested to the Public Accounts Committee that savings from a 50% reduction in NHS England staff and reductions to ICB running costs might be around £1.1bn, but this does not include estimates of redundancy costs. This is almost enough to run the NHS for three days, and it does nothing to diminish the uncertainty around the true scale of causes of the NHS financial sustainability challenge.

The uncertainty of the future

All these changes unfold against the backdrop of the government’s admirable three shifts: analogue to digital, hospital to community and treatment to prevention. But the strategy to achieve these shifts remains uncertain, with the 10-year health plan not expected until June. Is the NHS is being asked to plot a course across unchartered territory to an unknown destination?

So, what is certain? What we know from experience is that reorganisations of this scale cause distractions, take longer, and cost more than anticipated. They also carry an opportunity cost which may be at the expense of much-needed transformation and reform. Let’s hope there is some certainty, or at least direction, on the horizon for our NHS colleagues — and wherever the journey ends, that there is a steady state for them to build from.