NHS leaders warned of ‘fundamental reset’ to their financial regimes

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NHS England has told health leaders to expect a “fundamental reset” to local health services’ financial regimes and “accountability” after a £6.6bn budget deficit was predicted for the coming year.

Trust and integrated care board chairs and executives have been summoned to an urgent meeting in London next week by Amanda Pritchard and Sir Jim Mackey, the outgoing and interim CEOs of NHS England.

The warning comes as ministers start to bring the senior leadership of NHS England into central government, in a push to increase accountability for the health service’s performance.

The precarious state of NHS finances, with organisations predicting significant overspends during this next financial year, will limit leaders’ ability to deliver on targets to reduce the 7.46mn appointments backlog and boost productivity.

Local health leaders had been asked to submit first-cut headline financial plans for the 2025-26 year by February 27, with a final version expected by the end of March.

But in a letter sent to health leaders on Thursday, Prichard and Mackey wrote that the proposals seen so far had failed to meet expectations.

They added that planning was “especially important” in developing a blueprint that gave “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 (£6.6 billion when deficit support is stripped out) and limited confidence of delivery of operational expectations,” they wrote.

They could not allow the situation to “drift”, they added, “so we have been considering a fundamental reset of the financial regime and accountability”.

A government official said it was right that health bosses were “hauling in NHS leaders, getting a grip on spending and ending fantasy financial plans”.

However, Saffron Cordery, interim chief executive of NHS Providers, which represents health organisations across England, said the demands would heap pressure on overstretched budgets.

“This latest request from NHS England could mean trusts needing to tighten belts even more by scaling back or stopping services and shedding staff,” she said.

The letter was sent hours after Sir Stephen Powis resigned as England’s national medical director, the second major departure from NHS England within a week after Pritchard herself resigned as chief executive.

Powis, who became a household name during the pandemic for joint appearances alongside politicians in Downing Street briefings, will step down in July having served as NHS England’s most senior doctor for more than seven years.

Last week, NHS England said that Pritchard’s replacement, Mackey, would be given “a remit to radically reshape” the relationship between the health service and the government.

The changes in senior leadership at the organisation come at a time the service is grappling with high demand and budget pressures.

Health secretary Wes Streeting said Powis “has provided outstanding clinical leadership to the NHS over the past eight years, including during the biggest health emergency our country has faced in modern history”.

He added: “His knowledge, professionalism, and guidance helped the NHS rise to the challenges created by the pandemic.”

Powis said: “My time in post has been dominated by the pandemic and its ongoing impact. I will for ever be humbled by the extraordinary work of staff throughout the NHS to the greatest health emergency in a century.”