What does the financial reset involve and what has been the impact so far?

The 2025/26 planning guidance was clear; trusts and systems were required to work within fixed funding allocations, cut their cost base by at least 1%, and improve productivity by 4% – compared with average NHS productivity growth of about 2% per year in recent years.

To close the £6.6bn gap, NHSE instructed ICBs to halve their running costs and trusts to halve the growth in post-pandemic corporate cost growth by October. Trusts were encouraged to exhaust "all opportunities to improve productivity and tackle waste and take decisions on how to prioritise resources to best meet the health needs to their local population." 

Unlike 2024/25, when planning continued into June, this year's push for a rapid planning exercise meant trusts and systems finalised plans much sooner and avoided prolonged and protracted negotiations, both nationally and locally.

Some trust leaders appreciated this approach and have told us that it allowed them to focus on delivering their plans from the beginning of the financial year. However, others were more critical, saying it was not possible to adequately scrutinise and test plans in time to determine their deliverability.

By April 2025 all systems had submitted plans that balanced to the agreed deficit support limit; without that funding, the combined deficit would stand at £2.2bn.

In April 2025, our survey of trust leaders highlighted the scale of the challenge in delivering stretching performance targets within tighter budgets. This year, trusts have been set an unprecedented £11bn efficiency savings target and must make tough decisions to balance the books.

While trusts have delivered greater savings year-on-year, there will be a ceiling to what trusts can achieve without affecting both the services they provide or the staff they employ. Our survey results bear this out. 

Almost half of surveyed trust leaders (47%) told us their organisation is scaling back services this year, with another 43% considering it. Measures could include cutting public health programmes, ending some innovative treatments, or closing down local facilities (rehabilitation centres and community hospitals).

Over a third (37%) expect to cut substantive clinical posts, with 40% considering it; 86% will cut non-clinical roles such as HR, finance and estates. In addition, 62% reported that their organisation did not have a healthy cash balance and was dealing with an unsustainable underlying run rate.

As these results show, trusts are under pressure to deliver painful cuts that risk impacting on patient care. Trusts are doing their utmost to minimise the impact of these measures but will require support from government to successfully navigate this challenging period.