The analysis reveals the worst deterioration in financial health in a decade with the deficit double the previous year following small surpluses in in 2020/21 and 2021/22.
Nuffield Trust senior policy analyst Sally Gainsbury said: ‘These findings reveal just how fragile the financial health of the NHS is, which should sound alarm bells over the Government's promise of extensive reforms but with no new money to pay for them.'
The analysis shows NHS trusts in the areas of greatest deprivation saw the worst deterioration in 2023-24 compared to the previous year, and that the underlying gap between stable incomes and outgoings across the provider sector was at least £4.5bn.
While overall deficits are not as high as the record deficits of 2015/16, when overspends concentrated in the acute hospital sector led to a £2.2bn shortfall, the report notes they are spread across almost all provider types.
Acute hospital trusts reported the biggest deficits (overspends of 1.2% of revenues overall), but the steepest declines since 2019/20 have been in specialist, ambulance and mental health trust sectors, with the latter two falling into the red after previously reporting surpluses.
The North West (2.2% of revenue) and the Midlands (1.5% of revenue) recorded the biggest deficits, which along with the North East and Yorkshire, saw the steepest declines in financial health since 2022/23.
The report follows the latest NHS England board report that revealed a £1.6bn deficit in the trust sector by the end of December, suggesting the situation has worsened over this financial year.
A spokesperson for NHS England said: ‘NHS staff are working incredibly hard to deliver record levels of care and treatment for patients, with an ever-increasing demand for services, record levels of inflation and industrial action all affecting what the NHS could deliver in 2023/24.
‘It is essential NHS organisations operate within their budgets, and we are giving them greater flexibility to focus funding where it's needed the most – while continuing to take action to address any financial issues.'
A Department for Health and Social Care spokesperson said: ‘This Government inherited a broken NHS with trusts facing severe financial challenges, which is why we announced a £26bn increase in health and social care funding at the Budget. But investment must go hand in hand with a strong grip on any money spent, and proper reform alongside it.
‘We have set an extremely tough productivity and efficiency target for the NHS next year, but we are giving the heath service the tools to hit it, bringing our analogue NHS into the digital age, tackling waste and cutting out millions of pointless and missed appointments.
‘Through our Plan for Change, we will get the health service back on its feet and fit for patients long into the future.'
