New analysis reveals a sharp escalation in the financial pressures on NHS trusts, with a growing number setting highly ambitious savings targets for the current year. At least a dozen trusts are now aiming to cut costs equivalent to around 8% of their total budget allocations for 2025/26. This marks a significant increase from the previous financial year, 2024-25, when the average target was nearer 6% of funding. This trend reflects the persistent financial strain across the health service. Trusts are tasked with achieving these efficiency gains, part of a national effort to balance NHS finances, while simultaneously maintaining and improving front-line patient care, including reducing waiting times and boosting urgent care performance.
The current targets build on previous efficiency drives. In 2023/24, combined savings targets for trusts reached £9.3 billion, approximately 6.1% of total allocations, setting the highest efficiency challenge on record at the time. National planning guidance for 2025/26 explicitly mandates that providers must improve productivity and "live within their means." Trusts are implementing a range of strategies to meet these demands, moving beyond simple overhead reductions. Approaches include redesigning clinical pathways and reducing low-value care, cutting back office costs and scrutinising discretionary spend, and systematically redesigning services to "remove waste without cutting front-line capacity," focusing on areas like continuing healthcare, mental health, and prescribing optimisation.
However, delivering these substantial savings without compromising care presents a significant challenge and has led to tensions. For example, plans in Staffordshire and Stoke-on-Trent to achieve about 8.2% in budget savings have included proposed staffing reductions and efficiency measures in key services, drawing scrutiny from local oversight committees. The pressure to save coincides with high performance expectations from NHS England, which emphasises faster elective waits, improved emergency care, and better mental health access. Trusts must find a way to meet these service demands while also achieving substantial financial efficiencies.
While acknowledging the necessity of reducing waste, health leaders and analysts warn that over-reliance on savings as a primary strategy poses a risk. The King's Fund and others caution that, if not paired with sustainable funding and system reform, constant cost-cutting risks undermining patient care and staff wellbeing. They argue that tight budgets constrain the ability of trusts to innovate and deliver consistent, high-quality care amidst rising demand and costs. Front-line leaders stress that savings cannot come at the expense of core services or staff support, advocating for long-term financial planning over continuous, year-on-year cost-cutting. The rising targets also impact Integrated Care Boards (ICBs), which must align savings strategies with broader population health objectives, such as reducing inequalities. Looking ahead, NHS leaders are calling for greater clarity on funding reform and long-term financial planning to relieve pressure on trusts, maintain access standards, and support workforce stability. Without such reforms, high savings targets are likely to become a recurring feature of NHS planning, with significant consequences for both providers and patients.
