NHS bosses are seeking an emergency injection of £3bn to cover unexpected costs and have warned ministers that without it patients will wait longer for treatment and hospitals will start rationing care.
Their move presents a fresh problem for Rachel Reeves, the chancellor, as she tries to find ways to fill an estimated £30bn hole in the nation’s finances in her budget next month.
Hospital chiefs said unless they received extra cash they would have to cancel weekend and evening sessions of surgery, which give patients who are stuck on the NHS’s massive waiting list faster care.
They also threatened to stop doing procedures of “low clinical effectiveness”, such as removing painful bunions, which can restrict mobility, because they are not a good use of limited resources.
The £3bn demand is needed to cover the cost of NHS staff redundancies, strike action by doctors and higher drug prices, and is likely to cause consternation inside a government that is desperately short of cash. The NHS is already due to receive £196bn of the £211bn health budget for England this year.
Health service leaders argue that all three cost pressures they want the Treasury to cover were unexpected and have arisen since their funding settlement for 2025/26 was finalised.
Labour’s pledge to cut NHS waiting lists will become even harder to deliver without the £3bn, according to the NHS Confederation and NHS Providers, which represent health trusts, in what ministers are likely to view as a thinly veiled threat to scupper a key promise to voters.
The waiting list for people in need of non-urgent care within 18 weeks remains stubbornly high. It stood at 7.6m procedures and appointments when Labour won power in July 2024. After falling for six months it has risen again in each of the last three months and stands at 7.4m, despite Labour’s claim to have delivered 4m extra NHS appointments during its time in office.
The NHS bodies’ unprecedented joint plea will intensify already serious tension and infighting in Whitehall over who should foot the bill for an anticipated double whammy of redundancy payments and rising medicine costs.
The NHS’s 42 integrated care boards (ICBs) in England were due to make up to 12,500 of their 25,000 staff redundant by the end of the year as a result of health service cost-cutting, and Donald Trump’s drive to lower prices in the US is expected to lead to an imminent rise in the cost of medicines.
Reeves recently rebuffed a request from Wes Streeting, the health secretary, for £1.3bn in additional funding for this year so that the ICB redundancies, which were meant to be completed by Christmas, could finally begin, according to NHS sources. She offered him only half that sum, £650m, and even that was conditional on his Department of Health and Social Care (DHSC) agreeing to absorb the rising cost of drugs.
The chancellor and Streeting are engaged in what one senior NHS figure called a standoff over the £1.3bn. But the unknown cost of what higher drug prices would mean for the NHS is the “curveball” that has been complicating negotiations, they added. Whitehall’s behind-the-scenes row over NHS funding “is all in a mess at the moment and needs to be resolved”, the same source said.
The two NHS organisations say the £3bn they are seeking includes over £1bn to cover ICB redundancy costs, that the five-day strike by resident doctors in July cost £300m, and that higher drug prices could lead to the NHS having to pay as much as £2.5bn extra for vital medicines.
Matthew Taylor, the chief executive of the NHS Confederation, said: “The threat from unbudgeted redundancy payments, higher drug prices and renewed industrial action risks derailing progress on key waiting time targets and the wider reforms that are essential to getting the NHS back on track.”
One NHS trust chief executive said additional operating theatre lists “are the easiest things to stop when money is difficult, but they have an immediate impact on waiting times”. Hospitals would also do fewer “procedures which impact quality of life but aren’t life-saving”, they said. While bunions are very painful for those affected, they are not a life-or-death problem, they added.
The ICB shake-up is a key element of the radical reorganisation of the NHS that Keir Starmer announced in March, including the abolition of NHS England, despite Streeting having explicitly ruled out restructuring the health service before last year’s general election.
Richard Sloggett, an ex-DHSC special adviser, said: “This £3bn demand by NHS leaders is a dramatic intervention that leaves health ministers exposed. The rushed decision in March to announce a massive NHS reorganisation – without clear funding and plans attached to deliver it – has led us to this point. Add strikes and rising drug prices and the government is facing a perfect storm of issues on its number one public service priority.”
Daniel Elkeles, the chief executive of NHS Providers, defended the £3bn demand. “As the government prepares its budget, it’s time for an honest assessment and discussion about what the NHS can really achieve this year in these challenging financial circumstances, and about what is ‘doable’ to meet ministers’ ambitions in their 10-year plan for health,” he said.
The Conservatives have criticised Streeting over the bogged-down ICB overhaul. In the Commons last week, the shadow health secretary, Stuart Andrew, told MPs that Streeting “is very good at making promises, but the facts are that he is presiding over a reorganisation that has stalled, creating uncertainty for staff”.
When Andrew challenged Streeting to set out how many NHS staff would lose their jobs because of the reorganisation, the health secretary said only that he knew of “a number of expressions of interest in voluntary redundancy across my department, NHS England and ICBs”.
A DHSC spokesperson said: “This government has delivered a record-breaking £29bn investment in our NHS – including up to £10bn on digital and technology transformation and £750m for urgent capital repairs – demonstrating our unwavering commitment to properly funding the health service that we all rely on.
“We know that needless strikes will divert money, time and resourcing away from the frontline. That’s why the health secretary has urged the BMA to stop being selfish and start putting patients first.
“However, investment alone isn’t enough – it must go hand in hand with reform. That is why we’re doing things differently: not just fixing the NHS but moving it forward through our plan for change. And it’s already working. We’ve taken more than 200,000 people off waiting lists, delivered 5m more appointments and GP satisfaction is finally going up.”
