The analysis says that while the NHS and the wider DHSC often balance their budgets at a national level and remain within their annual spending limits this masks the serious financial pressures many individual organisations within the NHS have reported over recent years.
Danielle Jefferies, senior analyst at The King's Fund, said: ‘At first glance the NHS and DHSC budgets may appear manageable but as soon we look under the bonnet it is clear many organisations within the health service still face a perilous situation. Our own research tells us it is leading to NHS leaders having to make increasingly difficult choices that are directly impacting patient care.
‘Greater reduction in the numbers of frontline staff or further reprioritisation of investment in services could become more commonplace as these organisations try to cope, all of which will worry patients as they fear a decline in the quality of care.'
Acute trusts accounted for 75% of trust spending in 2024/25 and 69% of these trusts (82 trusts) were in deficit. Across other sectors, the percentage of trusts in deficit varied from 10% (1 trust) of ambulance trusts to 44% of community trusts (8 trusts).
ICBs reported a £0.6bn deficit in 2024/25 largely because of deficits in trusts they manage. They are forecast to balance their budgets in 2025/26, however, the think-tank notes this is only possible with the help of ‘deficit support funding' from central Government – without this ICBs would be £2.2 billion in deficit by the end of 2025/26.
The Government has set a target for all ICBs to break even without deficit support funding by the end of 2028/29.
Looking ahead, Jefferies called for a greater focus on prevention and looking at other ways to rebalance health spending so that it encompasses local authority and other public health spending.
An NHS England spokesperson said: ‘This historic analysis based on 2024/25 data underscores the progress we continue to make with latest data demonstrating a balanced financial position, above-target improvement to NHS productivity and high-levels of investment into modernising NHS facilities and technology.
‘By maintaining financial discipline this year we've turned a projected financial gap of £4.4bn into an NHS living within its means for the first time in years, highlighting the extraordinary efforts of NHS staff up-and-down the country to deliver better patient care and value for taxpayers.
‘We're continuing to support teams to find efficiencies and bring forward savings opportunities that will put the health service in the best possible starting for the new financial year on in April.'
