Inflation is eroding the NHS funding settlement, creating cost pressures for trusts, particularly for fuel, energy and consumables. However this briefing, based on a survey of trust leaders, focuses deliberately on the impact of the rising cost of living on NHS staff, and the patients and communities they support. The response rate to our survey of trust leaders was 54% with representation across acute, mental health, ambulance and community sectors, all showing a high level of concern about the effect the cost of living is having on NHS staff and patients alike.[1]

Inflation reached 10.1% in August, outpacing household incomes. Rising prices across energy, fuel and food have impacted the budgets of NHS staff as well as the communities that trusts serve, and the health and wellbeing impact of the increased cost of living is a significant cause of concern for trust leaders.

NHS staff received below-inflation pay awards for 2022/23, the real terms impact of which is compounded by This year, trusts say that high levels of inflation have worsened morale, and are making it harder than ever to recruit and retain staff. 

Alongside workforce pressures, rising costs have put pressure on trusts' budgets across a range of non-pay expenditure, particularly fuel, gas and electricity as inflation erodes the NHS' funding settlement.

Trusts therefore face an extremely challenging combination of tasks: the need to recover care backlogs in line with the elective recovery plan, and across mental health and community services; unprecedented levels of urgent and emergency demand and the likelihood that the broader economic context and the cost of living exacerbate demand for services, for both mental and physical health conditions.

As anchor institutions trusts are working individually and with system partners to support patients and staff with the cost of living. However they are concerned that the support they can offer will not be enough. There is now a need for national action to help coordinate support for staff and patients, mitigate the worst impacts on deprived and marginalised communities, and put in place long-term measures to help people and communities manage the rising cost of living without damage to their health.

[1] In August/September 2022 we surveyed chairs, chief executives, finance directors, HR directors, medical directors and nursing directors for their collective views on the impact of the cost of living crisis on trusts and the health and care sector. We included a distinct section on the impact on trust finances for chairs, chief executives and finance directors.