Introduction

The 10 Year Health Plan (10YHP) correctly identifies that the financial framework has a critical role to play in supporting the delivery of the three strategic shifts – from hospital to community, analogue to digital, and treatment to prevention. It argues that the current approach to finances is fragmented, short-termist and not aligned to the strategic objectives of the health service. The 10YHP commits to developing a new value-based approach to investment, to ensure that every pound of funding is committed to delivering “better outcomes, lower inequality and economic growth” (Department of Health and Social Care, 2025).

This new approach is intended to be underpinned by a number of specific reforms that will transform the NHS financial framework and support delivery of the three shifts. These reforms are centred around four key themes:

• Offering sharper incentives to improve performance and shift resources out of hospital and into the community.
• Developing a fairer geographic distribution of funding that distributes resources based on need.
• Adopting a new approach to financial management that will reward discipline and ensure the sustainability of the health service.
• Reforming the NHS capital regime to ensure investment drives improvements in patient care and productivity.

NHS leaders are supportive of the direction of travel and welcome the 10YHP’s ambition to shake-up the financial regime to put NHS finances on a more sustainable footing. However, while there is broad agreement with the intent behind the financial reforms, there is significant concern about whether they will be able to deliver the 10YHP’s vision. 

This report suggests ways to support the successful implementation of the financial framework reforms and alleviate concerns about the feasibility of proposals in their current form. It has been informed by extensive engagement with trust leaders, including interviews and roundtable discussions, since the 10YHP’s publication in July 2025. Although this engagement was led by NHS Providers prior to the merger with the NHS Confederation, the insights presented here reflect perspectives from across all sectors now represented within the NHS Alliance, the membership body formed through the merger.