This submission responds to the Public Accounts Select Committee inquiries into NHS Financial management and sustainability and Capital Expenditure in the NHS. 

Key points:

• Trust leaders welcomed the decision to pause the financial system in the face of COVID-19, giving providers across the NHS much needed flexibility and space to focus their efforts on coping with the virus. Trusts will need financial support to cope with complex challenges presented by COVID-19, and its knock-on effects.
• However, the measures introduced to tackle COVID-19 are temporary, and it is not yet clear how trusts will return to normal financial arrangements. The five-year funding settlement introduced from 2019/20 brought annual real terms funding growth up to 3.4%: while enough to keep pace with growth in demand, it falls short of what is needed to recover performance and transform services within the health service.
• COVID-19 is having a major impact in all sectors of the health service. While the effect on acute hospitals is widely understood, mental health, community and ambulance services have also faced significant challenges, having to rapidly adapt how they treat patients. All sectors face long term changes to how they operate, and this will have implications for the sustainability of services, trusts and systems.
• The government’s recent announcements on NHS capital are welcome, but capital budgets are not yet at the level needed by the NHS to be sustainable in the long term. The pandemic has shone a light on the current underinvestment in buildings and infrastructure and highlighted the clear need to transform estates and tackle backlog maintenance.
• We welcome the NAO’s findings on capital. We believe that that securing a multi-year capital settlement, aligning the capital budget with comparable economies, and establishing an efficient and effective mechanism for prioritising, accessing and spending NHS capital based on need are needed to support the NHS Long Term Plan (LTP).