Sustainability and transformation in the NHS Contents


The Department of Health and Social Care (the Department) is ultimately responsible for securing value for money from healthcare services. It sets objectives for the NHS through an annual mandate to NHS England and in 2016–17 gave it £105.7 billion to plan and pay for services and patient care delivered by the NHS. NHS England allocated the greatest share of this budget to 209 clinical commissioning groups, which largely bought healthcare from 235 hospital, community and mental health trusts. Trusts manage their expenditure against the income they receive, while NHS Improvement oversees and monitors the performance of trusts. The Department has made NHS England and NHS Improvement responsible for ensuring the NHS balances its budget.

In 2016–17, NHS England, clinical commissioning groups and NHS trusts and NHS foundation trusts (trusts) reported a combined surplus of £111 million against their income, a significant improvement compared to the combined deficit of £1,848 million they reported in 2015–16. This improvement was the direct result of the Department’s £1.8 billion Sustainability and Transformation Fund, paid by NHS Improvement to trusts for meeting financial and performance targets. Without this Fund, the combined financial position of the NHS would have been only slightly better than in 2015–16. As well as balancing its books each year, the NHS needs to invest in new ways of working that can better serve the changing needs of patients and increasing demand for services. To facilitate a more long-term approach to achieving sustainability, local partnerships of commissioners, trusts and local authorities have been set up to develop long-term strategic plans and transform the way services are provided more quickly.

27 March 2018