Fixing our finances

Fig 1: Projected budget growth

One of our main purposes is getting the NHS in south east London into financial balance, ensuring a sustainable future for our services.

In 2015/16, the amount of funding received by the NHS in south east London was £6.599bn. This includes all the money received by NHS trusts and local health commissioners as well as other funding, such as money for community care and NHS England’s budget to pay for specialised services in the area.

By 2020/21, the total available budget is expected to grow by 19% to £7.883bn (Fig 1).

Costs rising faster than budgets

NHS organisations do not always use money in the most efficient way, so sometimes spend more than they receive. On top of this, NHS costs are rising much faster than funding. 

These cost increases are caused by: ​

  • a growing population, getting older and sicker
  • increasingly expensive new technology
  • NHS costs rising annually above UK inflation

Because of these factors, and despite significant increases in funding from the government, by 2020/21 the NHS in south east London could face a shortfall of almost £1bn (Fig 2) if we do nothing.​


Fig 2: Projected financial gap

Demand for beds

If we can’t shift the focus of healthcare out of hospitals and give people the support they need closer to home, then by 2021 we may also need around 700 extra inpatient beds to cope with demand – the equivalent of building a new hospital in south east London.

Avoiding the overspend

Our aim is to reduce the amount we spend by £0.9bn by 2020/21.

We are not making budget cuts – the money coming in to the NHS in south east London is increasing over the next few years. Our challenge is to get the best value out of every NHS activity, working as efficiently as possible so that we stay within the funding available.

To improve care and ensure that services can be delivered sustainably in south east London, projects have been developed to help our organisations reduce waste and intervene earlier in people’s healthcare to keep more people out of hospital:

Clinical transformation - £137m: These projects are about changing how care is provided. This includes things like reducing A&E attendances, reducing the length of time people need to stay in hospital, diagnosing illness at an earlier stage, providing more care in community settings and focusing on preventing poor health.

Provider productivity - £226m: This project is about how NHS trusts work more closely to make administration and other support services ‘behind the scenes’ more cost effective. This includes things like collaborating on procurement to make the most of the collective buying power of the NHS, sharing administrative and clinical support services, and reducing the use of agency workers.

Review of specialised services - £190m: NHS England commissions these services and we are working with them to reduce duplication and improve the quality and consistency of care.

Provider cost improvement plans - £250m: In addition to our transformation projects, each individual NHS trust has a cost improvement plan which will significantly reduce organisational costs in south east London.

Sustainability and transformation funding - £134m: Our plans include the receipt of some funding to support the transformation of local NHS services.

South east London finances explained

We have published a more detailed briefing about how our plans are helping to balance local NHS finances, including how we have benchmarked cost reduction and performance for our clinical projects.