The NHS financial reset: why productivity is no longer optional and why the wrong kind will fail
29 Jan 2026 |
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The December NHS England Board papers do not arrive in a vacuum. They land in a health service where more than seven million people remain on waiting lists, corridor care has become a familiar feature, and workforce morale has been tested by years of pressure and recent industrial action. This is a system operating beyond its design limits, with little slack left to absorb further strain.
It is within this context that the Board’s message on productivity must be read. The tone may be measured, but the implication is stark: the NHS has entered a financial reset, and productivity is no longer a negotiable aspiration. What matters now is not whether productivity must improve, but where it can, and how it should be pursued without undermining care.
The case against the productivity narrative and why it resonates
There is a strong, credible counter-argument to the current productivity emphasis, and many NHS leaders and clinicians will recognise it immediately.
Productivity in healthcare is difficult to define and often poorly measured. Activity is not outcome. Speed is not quality. The NHS is not underperforming because staff are unproductive; it is struggling because demand continues to rise faster than capacity can be safely expanded.
At the same time, the constraints are real and visible. Estates are ageing and increasingly unfit for purpose. Workforce vacancies persist across key professions, while sickness absence and burnout erode available capacity. Flow is compromised by delayed discharge and insufficient community provision. Asking for productivity gains in this environment risks sounding like a familiar refrain: do more with less.
For many on the frontline, productivity targets can feel disconnected from reality, particularly when care is delivered in corridors, escalation spaces, or environments never designed for sustained clinical use. These are not abstract concerns. They go to the heart of patient safety and professional trust.
This scepticism is not resistance to reform; it is a rational response to lived experience.
Why productivity has nevertheless become unavoidable
And yet, despite these realities, the direction of travel in the Board papers is clear. The centre is no longer willing or able to rely on tolerance as a long-term strategy.
Deficit support funding is tightening. Cash controls are firmer. Several systems did not receive central support at Q3, not because pressures had eased, but because delivery confidence had not been sufficiently demonstrated. Financial realism is becoming a test of operational grip.
In effect, the NHS is being asked to show not just that it faces pressure, which is well understood, but that it can actively manage it. This is the financial reset.
The uncomfortable truth is that without some form of productivity improvement, the system faces a binary choice: unmanaged deterioration, or deeper and more disruptive intervention. Neither is acceptable. The debate, therefore, is not whether productivity must improve, but what kind of productivity is ethically and operationally viable in the current state of the NHS.
Why activity-led productivity is reaching its limit
For much of the recovery period, productivity has been implicitly equated with activity. More clinics. More theatre lists. More sessions. In the context of unprecedented backlogs, this was necessary and, at times, effective.
However, the Board papers expose the limits of this approach.
Urgent and emergency care performance continues to deteriorate. Ambulance response times remain stretched. Discharge delays persist. Community services are now explicitly identified as a growing access risk. In many providers, physical estate constraints cap throughput regardless of staff effort.
In this environment, additional activity that does not translate into patient progression through the system risks compounding pressure rather than relieving it. More effort does not automatically produce more outcomes. In some cases, it produces congestion.
Corridor care is perhaps the clearest illustration of this failure of conversion. It is not a workforce failure, nor simply a funding one. It is a visible symptom of a system that cannot reliably convert beds, staffing and funding into flow. In that context, asking for higher productivity without addressing flow is not just ineffective, it risks entrenching unsafe care.
A sharper proposition: productivity as flow, not volume
What the NHS now requires is not generic efficiency, but flow productivity.
Flow productivity focuses on where capacity is lost:
- beds occupied by patients who should have been discharged,
- clinical time absorbed by avoidable administrative friction,
- theatres under-utilised because downstream pathways are blocked,
- community services overwhelmed because upstream demand is poorly managed.
This is the form of productivity that aligns financial sustainability with patient benefit. It does not rely on asking staff to work faster or harder, but on removing the obstacles that prevent care from progressing safely and efficiently.
The Board papers implicitly recognise this shift. The emphasis on discharge pathways, community capacity, estates risk and operational grip all point to a system struggling not with commitment or effort, but with conversion.
The leadership choices the reset now forces
The financial reset brings with it a set of choices that many NHS leaders have been able to defer. These choices are difficult precisely because they are not technical; they are cultural and political.
They include decisions about:
- which activity to stop because it consumes resource without improving outcomes,
- where unwarranted variation is no longer acceptable, even when it is long-standing,
- how to prioritise flow over volume when the two come into conflict,
- how to protect clinical time in a system that continuously fragments it,
- and how to balance short-term performance metrics against long-term sustainability.
These decisions are uncomfortable, particularly in a service built on goodwill and professional commitment. But the Board’s signal is clear: avoidance is no longer neutral. Inaction now carries financial, regulatory and reputational consequence.
Productivity, trust and the workforce reality
None of this can be delivered without the workforce, and recent industrial action should be understood as a warning signal rather than an isolated episode. It reflected not just pay disputes, but a deeper fragility in trust between the system and its people.
Productivity strategies that ignore this context will fail, however technically sound they appear. If productivity is framed as extraction, more output from the same or fewer staff, it will be resisted, and rightly so. If it is framed as restoration, removing friction, reducing waste, and enabling professionals to practise effectively, it stands a chance.
Waiting lists reinforce this ethical boundary. When millions of patients are already waiting, productivity cannot be defined solely by speed or volume. Any approach that shortens waits for some by increasing harm or delay elsewhere is not improvement; it is a redistribution of risk, one that ultimately manifests in patient harm, regulatory failure, and rising clinical negligence costs.
A quieter, more consequential shift
The December Board papers do not announce a dramatic policy pivot. Instead, they signal a quieter but more consequential shift in expectation. Financial realism is no longer a background condition; it is shaping how autonomy, support and credibility are judged.
The NHS is being asked to move from resilience to intentional design to demonstrate that finite resource can be aligned with patient value, even under sustained constraint.
That is a demanding ask in the current state of the NHS. But it is also an opportunity to redefine productivity on terms that serve patients, staff and the system together.
Final word – Altin Biba, MBA, AMBA
Chief Executive, ProMedical
The most important mistake we could make in this phase is to confuse productivity with pressure. The NHS does not need people to work harder; it needs the conditions that allow good care to flow.
The leaders who succeed will be those who are honest about the limits of the system, clear about the trade-offs they are making, and disciplined in focusing effort where it genuinely improves patient outcomes. That is not an easy path, but it is the only credible one.
References
- NHS England – Integrated Performance Report, December 2025
- NHS England – Strategic Risk Register (Board Annex), December 2025
- The King’s Fund – NHS productivity: why it matters and what might help
- Health Foundation – Productivity, performance and patient flow in the NHS
- Nuffield Trust – Waiting lists, workforce pressure and system variation
- Office for National Statistics – Public service productivity: healthcare
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