Ray Dorney, the Director at Rockford Associates, examines the financial strain on the NHS and discusses the current challenges and future outlook
The National Health Service (NHS), one of the UK’s most cherished institutions, is facing profound financial pressures that threaten the quality, accessibility, and sustainability of healthcare. Despite its central role in British society, delivering care free at the point of use, the NHS is grappling with a convergence of economic, demographic, and structural challenges. The post-pandemic recovery, inflationary pressures, workforce constraints, and increasing demand are driving a crisis that demands urgent political and policy attention.
Mounting deficits and budget constraints
In recent years, NHS England has experienced widening financial gaps between its allocated funding and rising operational costs. Although the government pledged record funding levels – approximately £165 billion for 2024/25 – this has failed to match the pace of demand growth, inflation, and cost-of-living pressures. NHS trusts have been reporting growing deficits; forecasts for the 2024/25 financial year suggest a potential shortfall of around £3-4 billion without significant intervention.
Workforce pressures and pay demands
A key component of NHS spending is its workforce, comprising over 1.4 million people. Staff shortages and recruitment difficulties have placed substantial strain on existing personnel, contributing to burnout, absenteeism, and reduced productivity. While government efforts to expand medical school places and nurse training are welcome, these initiatives require time to yield results.
In 2023 and early 2024, the NHS experienced a wave of industrial action over pay and working conditions, notably among junior doctors and consultants. The subsequent pay agreements, while necessary to retain staff and restore morale, have compounded financial pressures. Trusts are struggling to absorb these increases without additional central funding, which is leading to further deficits and service rationing in some areas.
Delayed care and backlogs
The NHS continues to struggle with the aftermath of the COVID-19 pandemic, particularly a significant backlog in elective procedures and diagnostics. As of spring 2025, the waiting list for planned treatment in England exceeds 7.5 million, with many patients waiting over a year for care. Reducing this backlog has been a major political priority, but progress has been slow due to limited capacity and funding.
Clearing the backlog requires investment in both staffing and infrastructure, especially diagnostic hubs and surgical theatres. However, due to current financial constraints, many trusts are unable to expand their capacity at the required pace. Temporary solutions, such as using independent sector providers, come at a premium, adding to financial pressures without necessarily addressing systemic capacity issues.
Capital investment shortfalls
A critical concern for the NHS is the chronic underinvestment in capital infrastructure. Many NHS buildings and facilities are aging, with a maintenance backlog exceeding £10 billion. Outdated estates not only pose safety risks but also hinder operational efficiency. A lack of digital infrastructure further exacerbates inefficiencies and prevents full realisation of digital transformation strategies.
Rising demand and demographic change
Underlying all financial challenges is the relentless rise in demand. The UK’s ageing population, increasing prevalence of chronic diseases, and greater expectations for timely and advanced care continue to stretch NHS resources. The proportion of the population over 65 is growing, with older adults accounting for the highest proportion of hospital admissions and healthcare costs.
Policy uncertainty and political pressures
The NHS operates within a politically charged environment, where short- term pressures often outweigh long- term strategic planning. Frequent reorganisations, shifting priorities, and inconsistent funding settlements undermine stability. While the NHS Long Term Workforce Plan and the push for integrated care systems offer promising frameworks, implementation has been hindered by a lack of clarity on funding and operational autonomy.
Navigating a crossroads
The recent news of the merger/reorganisation/abolition of NHS England has somewhat overshadowed a potentially major shift in the set-up of the health system – including a review of the functions and purpose of integrated care boards (ICBs.) Whilst not fully clear, this will be accompanied by potential cuts to their operating costs of 50% later this year and likely cover a wide cost base.
It appears structural changes are afoot at all levels and functions within the NHS from providers, to ICBs and to regions. While public support for the institution remains strong, cost pressures and its ability to deliver safe, timely and equitable care is under serious threat. What will these changes mean for the way patients experience services?
The causes of the current financial challenges are complex and multifaceted, ranging from macroeconomic conditions and workforce dynamics to systemic inefficiencies and political choices.
Addressing these challenges will require more than emergency funding. It will demand long-term investment, honest dialogue about service expectations, and bold reforms to improve efficiency and sustainability. Failure to act risks eroding public confidence and compromising the health of millions. As one of the UK’s most visible symbols of social solidarity, the future of the NHS hinges not just on financial decisions, but on the collective political will to preserve and strengthen a national treasure.
How can Rockford Associates help with the financial strain on the NHS?
Rockford’s Accounts Payable Audit service consists of a review of historic payment transaction data, utilising proprietary in-house forensic software to uncover overpayments resulting from:
- Goods or services being paid for twice.
- Payments being made to the wrong supplier.
- Payments being made in the wrong currency.
- The by-passing of existing software duplicate checks.
- The same invoice being paid across different Accounts Payable systems
- Credit notes being paid as an invoice.
“Rockford Associates have worked with in excess of 160 NHS Trusts over the last 20 years; our track record of delivering real-world cash recoveries for the NHS is unrivalled and all delivered as part of the procurement-compliant CCS framework”.
To find out more about how you can benefit from a risk-free review delivered by Rockford Associates or to explore case studies of how we have assisted other Councils across the UK, please see our contact details below.
This work is licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International.
