National Audit Office: Government lacks clarity on the impact of its funding for independent adult hospices as demand rises for palliative and end-of-life care

• The Department for Health and Social Care (DHSC) and NHS England (NHSE) do not clearly understand what proportion of palliative and end-of-life care is delivered by independent adult hospices, and therefore, how much they are reliant on the sector, or what the real impact of government funding is.
• Nearly two thirds of adult hospices reported a financial deficit in 2023-24, with combined income from fundraising and government funding in decline.
• Demand for hospice care is projected to rise, placing further pressure on adult hospices, some of which are already reducing the services they can provide. 

The government does not fully understand how its funding for palliative and end-of-life services, provided both within the NHS and by independent adult hospices, is being used to support rising demand for palliative and end-of-life care due to a lack of data, a new National Audit Office (NAO) report has found.1 

Hospices are charities that provide palliative and end-of-life care services across the UK, and are partners within the NHS's local care systems. 

With the demand for palliative and end-of-life care anticipated to rise in line with an expected increase in the number of older people in England dying or choosing to spend the end of their lives under the care of a hospice, further pressure will be placed on the financial resilience of the sector. 

The availability of hospice care varies greatly across England. Charitable hospices were set up through voluntary action, and the variation in availability is a result of the unplanned way the sector developed.2 

Funding from Integrated Care Boards (ICBs), through grants or contracts, met 40% of independent adult hospices expenditure on services in 2023-24, equating to over £400 million. But a lack of central oversight from DHSC means it is unclear what this funding is specifically used for, or whether it is sufficient to maintain the sector's future without more services having to be delivered by the NHS to meet increasing demand.  

DHSC and NHSE do not currently know how much palliative and end-of-life care  independent adult hospice provide in England, and therefore how reliant they are on the sector, because the way they provide funding to hospices makes it difficult to determine the level of activity delivered and limited financial and activity data are available.3  

Although DHSC and NHSE have no statutory responsibility in relation to independent hospices, it is important that hospices are financially sustainable so that they can provide the level of palliative and end-of-life care that DHSC and NHSE rely upon. NHSE has increasingly recognised and increased its role in palliative and end-of-life care in recent years. 

Nearly two thirds of independent hospices reported a deficit in 2023-24, and overall  expenditure was £78 million more than the income generated. In response to this, some hospices have reduced services,4 and there have been cuts to both beds and staff.   

The financial resilience of the independent adult hospice sector faces further challenges due to the declining return on investment from fundraising. A continuation of this downward trend could lead to increased reliance on government funding to provide palliative and end-of-life services.5  

The government made several large additional payments to provide extra capacity for the NHS during the COVID-19 pandemic. Since then, there has been an additional injection of £100 million of capital funding to support hospices' infrastucture.6 

Gareth Davies, head of the NAO, said: 

“Independent hospices play a key role in providing palliative and end-of-life care and provide choice for people at the end of their lives.  

“With many more people expected to want hospice care in the future, it is crucial that the sector is financially resilient. DHSC and NHSE should assess how they would meet increased demand for palliative and end-of-life care should services delivered by independent adult hospices be insufficient.” 

ENDS 

Notes to editors

1. The report will be available on the NAO website from 00:01 Wednesday 29 October.
2. ICBs are NHS organisations responsible for planning health services for their local population. This variation in availability reflects the unplanned way the independent adult hospice sector has developed since the 1960s, as local charities outside of the NHS. The range of services individual hospices offer also varies. 
3. All independent hospice charities across the UK, including Marie Curie and Sue Ryder, are members of the umbrella organisation Hospice UK, which supports the sector and advocates on its behalf. Data on these independent hospices is collected by Hospice UK.
4. In 2024-25, the NAO was aware of 11 independent adult hospices in England which reported service reductions or staff redundancies, and other hospices have announced plans to reduce services, in response to reduced income. Cuts appear to be across all types of services offered by hospices.
5. Charitable donations and fundraising made up two thirds of the sector's income in 2023-24. The independent adult hospice sector's overall fund-raising rate of return has been decreasing since 2021-22, decreasing to £1.96 per £1 spent in 2023-24. If this downward trend continues, the sector will have less total income to fund its palliative care services and hospices will become, in general, more reliant on government funding if they are to maintain their levels of service.  
6. Over 2020-21 and 2021-22 during the COVID-19 pandemic, NHS England provided independent adult hospices with £384 million in three waves to secure and provide extra capacity for the NHS, including inpatient and hospice-at-home beds. In December 2024, DHSC announced a £100 million one-off capital fund over 2024-25 and 2025-26 for adult and children's hospices.