NHS reality check: the financial and performance ask for trusts in 2022/23

The pressures facing the NHS now can be traced back over the last decade as four long-term fault lines, all of which have been exacerbated by the pandemic:

• The longest and deepest financial squeeze in NHS history.
• A growing mismatch in capacity and demand resulting in pressure on national performance standards pre pandemic.
• Staff vacancies and the need for better workforce planning.
• An underfunded social care system in need of reform

Our survey shows how the pandemic has deepened these existing fault lines, leaving trusts facing a tough task in 2022/23 to meet patient need within the financial envelope and to deliver stretching efficiency targets.

Trusts are ambitious about reducing care backlogs and they are caring for more patients, but some targets will be challenging to deliver. The majority of respondents are confident they will eliminate long waits of over 52 weeks by March 2025, and that their trust will ensure 75% of patients who have been urgently referred by their GP for suspected cancer are diagnosed or have cancer ruled out within 28 days. However, only 37% of respondents are confident that their trust will be able to deliver 104% of pre-pandemic elective activity by the end of 2022/23.

Staff shortages, burnout, capacity constraints, challenges in patient flow and increasing clinical complexity will limit trusts' ability to make activity gains during 2022/23. The biggest barriers reported are operational pressures coupled with major staffing shortages.

Trust leaders have welcomed the recent announcement by NHS England/Improvement (NHSE/I) to allocate an additional £1.5bn to systems to alleviate inflationary cost pressure.* While this will help, there will still be a need to continue to monitor and address inflationary pressure over 2022/23. Trust leaders will also want reassurance from government and national bodies that the additional funding to address inflationary pressure will not put other national health and care budgets under pressure. The survey was carried out before the announcement from NHSE on 19 May 2022 about the additional £1.5bn funding injection.

The financial ask of 2022/23 remains challenging for the vast majority of trusts. 85% of respondents said they are not confident that their system will reach financial balance in 2022/23, while 91% said they are not confident that their trust will end 2022/23 in a better financial position than it ended in 2021/22.

Trust leaders strongly support an uplift in staff pay but this must be appropriately funded. 94% of trusts are not confident that they would have sufficient revenue funding for additional pay costs if the pay review body’s recommendations exceed budgeted allocations.

Trusts are working as hard as they can to drive cost improvement programmes. However, they are unlikely to deliver efficiency savings at the level expected by government and NHSE in 2022/23. Among respondents, the average estimated required efficiency savings rate for 2022/23 is 4.04% but 73% of respondents told us that a realistic and achievable efficiency savings target would be between 1% and 2.5%.

About our research

Our report is based on evidence collated from trusts across England. We took a mixed methods approach, conducting a survey and in-depth interviews.

In April 2022 we carried out an online survey of chief executives and finance directors of all trusts and all trust types: acute, acute specialist, ambulance, community and mental health and learning disability. The survey was focussed on trusts' views on meeting the combined financial and operational ask of them for 2022/23.

We received 106 responses to the survey. This accounts for 50% of the provider sector (212 trusts in England). All trust types and regions were represented in the survey. We supplemented the quantitative findings with 12 in-depth qualitative interviews with a set of finance directors covering a range of sectors and trust types.