NHS funding may be ‘maxed out’ but change is still possible

With NHS funding stretched to its limit, real transformation demands more than just balancing the books — it calls for honest, evidence-based decisions about what to start, stop and sustain, writes Andi Orlowski

When Sir Jim Mackey declared the NHS had “maxed out” its funding, it was not just a financial red flag; it was a statement of systemic truth. We have reached the end of the line for topping up budgets to meet rising demand. The next phase is not about doing more with more, it is about doing better with what we have. And that means making tough decisions.

On paper, the maths is simple: Value = (Health Outcomes x Patient Experience) / Cost

We draw on the best available real-world data, however imperfect, triangulating routine activity, cost, and outcomes. We can still do this rigorously and robustly without perfect data and then add stakeholder insights to build a pragmatic evidence base that supports transparent, informed decisions, boosts outcomes, improves experience, and manages costs. A neat equation for messy realities.

But as much as it pains me to say, as a health economist and statistician, the real challenge is not mathematical - it is human. Yes, you need to have someone who knows what they are doing to get the maths right, but implementing that insight means deciding which services to expand, which to adapt, and, hardest of all, which to stop, and that takes human collaboration.

Cutting services: The emotional terrain

Starting services can be surprisingly easy. Transformation often begins with a burst of energy from an innovative clinician with a clever idea to shorten hospital stays or redesign a care pathway.

These initiatives are full of promise, supported by early evidence, and often launched with enthusiasm. There is usually an appetite for trying something new, especially when it aligns with professional pride, patient benefit, and innovation.

New services do not tend to face the same scrutiny as existing ones; they get layered on with less resistance, are seen as progress, and rarely require the difficult work of questioning what should be stopped to make room.

Stopping services is hard. Not because we can’t calculate the return on investment, but because services come with history, loyalty, and meaning.

Clinicians may have built their careers around certain pathways. Staff identify with services they have delivered with pride. Patients and the public often equate long-standing services with quality and safety.

Removing or reconfiguring those services can feel like a betrayal, not a better use of money. These are not abstract numbers.

These are people’s work, their care, their careers, and their lives. But as time passes, even the most cherished services can become outdated. New evidence emerges, better models appear, and population needs evolve.

We are not talking about cuts for the sake of saving money; we are talking about making deliberate, evidence-informed decisions when the data suggests there may be better options.

It is not that existing pathways or interventions have no value - it is that others might offer greater value to patients and the population.

These are tough decisions, emotionally and professionally. But clinging to services simply because “we have always done it this way” is the sunk cost fallacy in action. Real transformation means having the courage to change course when the evidence leads us somewhere better.

What does value look like to you, your staff, and your communities?

Add in public and patient perspectives, and the idea of “value” becomes even more complex. Value is not universally defined; it is personal, cultural, and contextual.

For a shift in services to be fair, equitable, and supported, we need to hear from those it affects. That means engaging deeply with patients, staff, and citizens, and not just at the end of the process.

NHS transformation and keeping within budget won’t be driven by maths alone. The data might tell us what makes sense, but people decide what makes change stick

Systems don’t make it easy

Hugh Alderwick, director of policy at The Health Foundation, wrote a great paper a few years ago, as did research fellow Justin Aunger, both highlighting why change in the NHS is rarely straightforward. Their reviews of health systems showed that collaboration across systems is hampered by differences in motivation and purpose, culture and relationships, resources and capabilities, governance and leadership, external pressures, trust and faith. These are not minor barriers, they are structural frictions that must be surfaced and addressed if transformation is to succeed.

So how do we do the maths and create a common language to navigate the emotional terrain? How do we align motivation and purpose? How do we agree to move resources from organisation A to organisation B to benefit organisation C? How do we agree on markers for success, lead markers for prevention, evidence-based inputs and outputs, as well as waiting for lag marker outcomes?

This is where evidence-based methods come in. Programme budgeting and marginal analysis (PBMA) helps decision-makers assess the impact of reallocating resources across services, identifying those that deliver the greatest value. It is a powerful tool for surfacing trade-offs and enabling investment where it matters most.

Socio-technical allocation of resources (STAR) brings in the human side, connecting the technical with the social. It creates space for patients, clinicians, system leaders, and the public to engage in structured conversations about priorities. It gives legitimacy to tough choices and fosters shared ownership of the outcomes.

Multi-criteria decision analysis (MCDA) ties it all together, bringing transparency to how decisions are made across multiple competing criteria: cost-effectiveness, clinical impact, equity, and public preference. It does not pretend there is a single right answer, but it makes clear how choices are weighed and why.

These tools are free and non-proprietorial, and have been around for years, tried and trusted. Many of them have the “maths built in”, so you don’t even need a health economist (though of course, we are all lovely; why wouldn’t you want to work with us?).

These tools have been created for the NHS by the NHS, think tanks and academia, and are open source and free to access for all public sector colleagues. You definitely do not need some ridiculously expensive, suited PowerPoint jockey riding in selling something you can access and implement for free.

It’s been done before, and it works

Take chronic obstructive pulmonary disease (COPD) management. In a collaboration between integrated care boards and the health economics unit, PBMA, STAR and MCDA were used to shift resources from hospital-led models to community-led approaches. It was not easy.

But by engaging patients, frontline staff, and leaders, the system rebalanced spending towards better outcomes and experiences without increasing cost. Cuts were made, and value increased.

NHS transformation and keeping within budget won’t be driven by maths alone. The data might tell us what makes sense, but people decide what makes change stick.

We need to acknowledge the emotional weight of change, the complexity of the system working, and the diversity of views on what matters most.

PBMA, STAR and MCDA give us the frameworks to navigate this space with clarity, compassion, and purpose. Not to wield a chainsaw, but to have honest, intelligent, human conversations about how we spend better.

Sir Jim’s comments may sound stark. But they open the door to something better: a future where we decide together what we value, what we can let go of, and how to build a health service that truly serves its people.