A key part of enabling the NHS to improve its productivity is the ability to make investments which in turn is related to the overall health of NHS finances.

The NHS is, however, grappling with severe financial challenges due to factors such as Covid-19, inflation, industrial action and an aging population. These pressures are routinely pushing expenditures beyond the budget, necessitating frequent and substantial financial support.

While spending might be increasing, it’s possible to see the increases being less than the increases in demand due to aging and population growth. It’s possible to see a world where capital investments are further restricted to support revenue funding, and so a low investment spiral worsens, and the impact on patients, their care and outcomes increases. It’s also possible to see a future where the NHS is spending less than the long-term plan trajectory.

In our regular discussions with NHS leaders, optimism about financial prospects is rare.

One thing we observe is there is a real split in the service between those who believe the NHS should save money and those who believe the NHS just needs more money. There is a widespread perception among NHS staff that the private sector’s involvement should not extend beyond the role of a supplier. Discussing consumables or IT is acceptable but mentioning services and operational delivery often triggers real challenges and genuinely heartfelt reactions.

This makes it difficult for private sector organisations to propose cost saving strategies within the NHS. However, it’s important to understand that our approach does not advocate for privatisation or a race to the bottom. Instead, we advocate for strategic, sustainable financial practices that are designed to bolster the longevity and effectiveness of the NHS. At Capita, we believe in the NHS and the core values of the NHS and its founding principles.

Care not cost: Enhancing service delivery 

Fundamentally for Capita this is a conversation not about cost but care. If a partner like Capita can deliver real terms savings, without taking on clinical services or making clinical decisions, then any saving generated is an opportunity to invest into wider / better care.

Having more headroom for investment will, in turn, drive higher productivity, resulting in even more care. Along this journey, both patients and staff will benefit from improved experiences. As example, it’s true to say that a lot of NHS money (and time) is spent on activities that aren’t core to delivering clinical activity or well-highlighted legacy practices - as documented in recent reports. For patients, these inefficiencies often translate into delays, negatively impacting outcomes and eroding public confidence and trust.

Furthermore, cost savings play a pivotal role in advancing broader policy initiatives such as the Integrated Care Systems (ICS) agenda. As we shift towards a more community- and primary care-centred model, substantial investment in these areas becomes essential. Given the largely static NHS budget, any significant enhancements in primary or community care capacities will likely be funded initially through savings. These savings can then be strategically redirected through structures such as the ICS to address areas of greatest need.

Practical solutions and strategic partnerships

The NHS doesn’t need another report; it needs viable options and authentic partnerships to confront its challenging circumstances effectively. True partnership involves risk-sharing, not merely exchanging empty words within a traditional, one-sided delivery model.

What could this mean in real terms, and how can an organisation such as Capita help the NHS in achieving financial flexibility and headroom?

  • We have proven experience working with NHS organisations to reduce their spending and simplifying their supply chains. We can help with the initial analysis, as well as delivering the transformation of procurement services. We’ve already saved the NHS millions and offer guaranteed savings outcomes, putting our fees at risk to ensure commitment and accountability.
Energy and net zero
  • The NHS faces the dual challenge of rising energy costs, with substantial capital investment required for net zero initiatives, and capital expenses amounting to tens of millions for many providers. Our solution addresses both these issues by changing the relationships between NHS providers, and energy and infrastructure suppliers. In many cases, we facilitate the implementation of net zero infrastructure such as solar panels, EV charging stations and batteries, with no initial capital outlay, while guaranteeing that energy charges remain below grid prices. This approach not only circumvents capital costs but also promises significant annual operating savings for providers.

The NHS has three primary challenges within estates: 

  • Legacy PFI contracts: The NHS estate has a significant maintenance backlog. These issues should not fall by default on the NHS. We’ve identified critical repairs in PFI estates and facilitated NHS savings of £200m in remediation costs.
  • Optimising existing estates: We help in transforming existing estates, yielding significant savings through rationalisation and supporting the initiation of new estate programmes that deliver ongoing revenue benefits to care providers.
  • Minimising estate condition impact: The maintenance backlog costs the NHS in lost activities and mitigation expenses. We deploy advanced monitoring and analytics to enable NHS organisations to better understand their estates’ condition and operational risks in real time. This approach promotes more targeted spending and minimises disruption.
Shared services

The NHS has a long history of utilising shared services through mechanisms such as SBS and the CSUs. With the rise of the ICS agenda, there is a need to reduce delivery costs and shift demand. Transactional processing alone is insufficient to deliver the disruptive shifts required by NHS policy. These shifts will require a more integrated approach across health services, local government, and broader agendas such as benefits, skills and education. One of our key strengths is our breadth and depth of experience in the public sector and our proven ability to integrate and transform services.

Our approach empowers the NHS to excel in its core mission. The examples outlined above do not interfere with clinical services or decisions. Reducing costs does not equate to a reduction in the quality of care. When it’s done well, it can improve productivity, clinical availability and actually improve the overall quality of care.

Despite significant challenges, the right partnerships, built on shared values and commitments, present genuine opportunities to support the NHS in overcoming these hurdles.

Contact us today to discover how our agile services can serve as foundational pillars to balance cost and care within the NHS:

Written by

 Tim Coney

Tim Coney

Health and Welfare Market Engagement Director, Capita

Tim works side by side with NHS organisations to understand system challenges, help align Capita’s capability and foster new relationships. As a technologist by background, he has over 20 years’ experience delivering healthcare transformation and care system integration, including management consulting and service outsourcing. As a lifelong believer in the importance of the NHS to our national fabric, Tim champions that it must transform to endure, working in partnership with a rich ecosystem of organisations to springboard reaching those transformation goals.

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