How well does the NHS manage its budget?

The performance measures you’ve learned about so far focus on the quality of health care in the NHS. How the NHS performs financially is another important way we can understand how the NHS is doing.

In this video Siva Anandaciva, Chief Analyst at The King’s Fund, explores how we can understand the NHS through how well it manages its budget. In the video, Siva talks about some big financial figures such as the £1 billion deficit across NHS care providers in 2017/18. To put this into context, £1 billion could run the NHS for about three days.

In June 2018, the Prime Minister announced extra NHS funding for the next five years, starting from 2019/20. This new settlement increases NHS funding at an average of 3.4% a year, which means that by 2023/24, NHS funding will have increased by £20.5 billion per year. The government hopes this additional funding will achieve a number of things, including eliminating deficits in NHS care providers, but there are other factors, such as recruiting enough staff, which also affect financial performance.

In September 2019, as part of the Spending Round, the government announced further funding for capital investment, public health and the education and training of the NHS workforce. This translates to a total budget increase for the Department of Health and Social Care of a little under 3% between 2019/20 and 2020/21, which is still less than the long-term average increase in funding.

As you’ve just heard, the NHS is experiencing financial pressures at the moment. If you were in charge of the NHS budget and were tasked with saving money, what measures would you take?