Organisation objective
- NHS Mandate from Government
Executive summary
This paper provides the Board with an update on the month 10 financial position for 2023/24.
Action required
The Board is asked to note the month 10 2023/24 financial performance of the NHS.
Background
Month 10 financial position 2023/24
Headline Revenue Position
- The latest data published in the Autumn Statement shows inflation outturned for 2022/23 at 6.7% and is forecast to be 6.1% for 2023/24. This has generated an unfunded pressure of £1.7 billion. The impact of strikes through to the end of February was a financial cost of over £1.2 billion and an equivalent loss of elective activity.
- Following agreement with Government, we have injected a further £1.2 billion into system allocations and reduced the elective activity threshold to 103% (from originally 107%) to largely address the financial impact of strikes to February on the NHS. We also agreed with Government to allow flexibility on previously ring-fenced funds to help systems to deal with the inflation pressure.
- Table 1 below sets out the revenue expenditure position to the end of January 2023. The bottom-line position is shown on a non-ringfenced RDEL basis. Compared to plan, the aggregate YTD system position shows expenditure to be above plan by £1,129m (1% variance versus allocation) after deploying the additional funding and support described. Overall, the total forecast expenditure for the NHS of £171.1 billion is £90 million above plan (less than 0.1%).
Table 1: Financial position at month 10
| Expenditure basis | In year allocation | Year to Date | Forecast Outturn | ||||||
| Plan | Actual | Under/(over) spend | Plan | FOT | Under/(over) spend | ||||
| £m | £m | £m | % | £m | £m | £m | % | ||
| Systems | 131,608 | 110,052 | 111,181 | (1,129) | (1.0) | 131,623 | 132,712 | (1,090) | (0.8%) |
| ICB net expenditure Provider expenditure Provider income | 109,240 102,929 (102,116) | 109,671 107,385 (105,874) | (431) (4,456) 3,758 | (0.4) (4.3) (3.7) | 131,053 123,258 (122,688) | 131,521 128,134 (126,942) | (468) (4,875) 4,254 | (0.4%) (4.0%) (3.5%) | |
| Specialised Commissioning | 25,144 | 20,651 | 20,620 | 31 | 0.2 | 25,144 | 25,059 | 85 | 0.3% |
| Other direct commissioning | 2,719 | 2,227 | 2,173 | 54 | 2.4 | 2,719 | 2,652 | 67 | 2.5% |
| Central costs | 12,243 | 10,253 | 9,756 | 497 | 4.9 | 12,243 | 11,697 | 547 | 4.5% |
| Transformation and reserves | 3,240 | 0 | 0 | 0 | 3,240 | 2,940 | 301 | 9.3% | |
| Technical and ringfenced adjustments | (4,091) | (3,411) | (3,025) | (386) | 11.3 | (4,091) | (4,091) | 0 | (0.0%) |
| Total – non-ringfenced RDEL | 170,864 | 139,772 | 140,704 | (932) | (0.7) | 170,879 | 170,969 | (90) | (0.4%) |
4. We are continuing to see improvements in productivity across the NHS (in particular, once we take account of strike action) as we recover from the impact of Covid; agency spending adjusted for pay inflation is more than 10% down on the same period last year.
5. The system financial position is forecast to overspend by £1.1 billion (0.8% variance versus allocation). We anticipate that underspends against NHS England central costs, due to both staff vacancies and increased expenditure controls combined with managed underspends against transformation funding, specialised drugs and devices budgets will be sufficient to offset the system overspend and hence ensure NHS England meets its financial targets for the year.
Capital Expenditure
6. Providers have spent £3,878 million on capital schemes to month 10 (excluding IFRS 16 expenditure relating to lease assets), representing 52% of their full year budget (compared to 51% at the same stage last year). The DHSC provider capital budget for 2023/24 (excluding funding for leases) is set at £7,395 million against which we are currently forecasting an underspend of £32 million.