NHSE abolition ‘ensures money improves service for patients’
- 26 March 2025
- Chancellor Rachel Reeves has said that the abolishment of NHS England “ensures that that money goes directly to improving the service for patients”
- She announced that the government is bringing forward £3.25 billion of investment “to deliver the reforms that our public services need through a new Transformation Fund”
- The Spring Budget was announced by Reeves on 26 March 2025 in the House of Commons
Chancellor Rachel Reeves has stated in today’s Spring Budget that the abolishment of NHS England “ensures that that money goes directly to improving the service for patients”.
Speaking in the House of Commons on 26 March 2025, Reeves highlighted that plans to bring NHS England back into the Department of Health and Social Care will help to drive efficiencies.
“The health secretary is driving forward vital reforms to increase NHS productivity, bearing down on costly agency spend to save money so that we can improve patient care,” she said.
Building on that work, Reeves announced that the government is bringing forward £3.25 billion of investment “to deliver the reforms that our public services need through a new Transformation Fund”.
“That is money being brought forward now to bring down the costs of running the government by the end of the forecast period, by making public services more efficient, more productive and more focussed on the user,” Reeves said.
The Transformation Fund will be used to invest in AI and technology, but there was no mention specifically about it being used to invest in the NHS and healthcare.
In the 2024 Autumn Budget, Reeves pledged to invest more than £2 billion in NHS technology and digital.
Some industry figures have reacted to the chancellor’s Spring Budget. Here’s what they had to say:
Phil Bottle, managing director at SARD:
“The increases in revenue for health and social care announced in the Autumn budget were positioned as a down payment on achieving 2% productivity increases over the following 12 months.
“But, since the previous iteration of the budget we’ve been told that NHS England will be abolished, and ICBs will lose 50% of their staff.
“While less bureaucracy and duplication are to be celebrated, taking away support services, experienced operational professionals, and good managers will increase the burden on clinicians who will be left to spin more plates than they were before.
“The impact will ultimately be on a more stretched clinical workforce, doing things that are ultimately not core to their role of providing patient care.
“Without accurate, timely visibility of who is working within the NHS and what their specific roles entail, the ability to right-size staffing and align resources ethically with patient demand remains limited.
“Improving data quality across clinical, technical, and administrative roles is vital to understanding productivity levels across care pathways, especially in community services where data gaps are widest.”
Ram Rajaraman, healthcare and life sciences industry Lead at Quantexa:
“The big takeout from today’s spring statement is that efficiency is the word of the moment.
“Whilst it’s encouraging to see the chancellor planning to implement measures that increase the efficiency of public sector services, we must ensure that efficiency does not become a dirty word associated with nothing but cost-cutting.
“True efficiency is delivered by empowering NHS organisations and regions to use their data to drive productivity – by connecting data across systems to drive accessibility of information and improve care.
“Without improving strategic planning and operational reliance to drive efficiency, these plans for public services won’t work.”
Julian Coe, managing director at X-on Health: “The chancellor’s commitment to driving efficiency through AI is encouraging and understandable.
“I would implore all Government to keep our data sovereign and use the wonderful companies we have in this country pioneering world class AI solutions.
“It is too simple though to assume that procuring technology will be the answer because unless it’s the right technology correctly implemented it will not deliver any benefits.
“There are plenty of proven examples of change initiatives that can deliver both cost savings and better patient care. These need to be deployed at scale. Many involve digital transformation but many don’t.
“Good providers can support the existing exemplars in the NHS to improve patient access to care equitably for less money.”
“With the NHS being one of the primary beneficiaries in the Autumn Budget, it’s not wholly surprising there was little mention in the Spring Budget. However, it is disappointing to see social care being overlooked again.
“The sector is in crisis, so the decision to bring funding forward to improve public services – such as £3.25 billion for a new transformation fund – could have been a positive step forward for whole-person, community-based care, if social care was included in the first allocation.
“Particularly given the chancellor has allocated some of this fund to pioneering AI. While there is value in using it to modernise the state, the use of ethical AI in health and social care is a prime example of where tech can drive efficiencies and release the capacity of health and care professionals to have more time to look after their patients/clients.
“Something critically important if we are to achieve Wes Streeting’s three big shifts; from analogue to digital, hospital to community and treatment to prevention.”
