Growing financial crisis for hospices met with no serious government response, PAC warns (re-sent with embargo Wed Mar 18)

- PAC calls for evidence of urgent reform as patient care already being affected and sector warns of funding cliff-edge from April

- Too many patients still spend last days in hospitals rather than at home or in a hospice

The government and NHS England are not responding to the growing financial crisis in the adult hospice sector with the seriousness and urgency the situation demands. In a new report on the financial sustainability of adult hospices in England, the Public Accounts Committee (PAC) warns that some hospices have recently reduced the volume or range of the essential services they provide and others are planning to do so, at a time when demand for palliative and end-of-life care is rising.

The PAC's inquiry heard that hospices are facing a funding cliff-edge from April, and that if no new funding is injected into the sector before the new financial year, hospices would be forced to reduce services further. We were told that some hospices have already announced staff redundancies, with the PAC's written evidence from several hospices demonstrating significant financial deficits. Marie Curie, one of two national chains in the sector, told the PAC that it is currently running a structural operating deficit. PAC members are warning that it is urgent that government address the withdrawal of services and cuts which are being made now ahead of April.

The report warns further of the wider dimension of how the financial situation for hospices risks depriving the NHS of the huge value they provide beyond statutory palliative and end-of-life care – expert advice and training, innovation in care, leadership in the move to provide more care in the community, and support for care homes and GPs.

Around a quarter of adults are still spending their last days receiving costly palliative care in hospital, where many would prefer not to be and the PAC's inquiry heard that a third of people receiving acute care in hospital are in the last year of life, accounting for about 10 million bed days each year. Expert witnesses further stressed the importance of having earlier conversations with patients and families about approaching death, to ascertain their wishes, without which people may continue to have costly treatment from which they may not benefit. The PAC's report is seeking a detailed explanation from NHS England on how it will move more palliative and end-of-life care into the community.

The government's current proposed solutions to the sector's challenges relies on local health boards solving everything locally, despite the boards themselves currently being subject to greatly reduced staff numbers under the government's wider reorganisation of the health system. The details of the government's new framework for hospices to improve how boards pay for services from hospices are unclear. The framework itself is not set to be completed until autumn of this year with further time needed to implement it, though several hospices have announced cuts in the coming months if additional funding cannot be found. Government provided ?125m in funding to hospices recently, but the PAC's inquiry heard from the sector that while the capital funding is welcome it is one-off funding that will not address the shortfalls in funding for service delivery.

The PAC's report notes that, amid this slow pace of reform, the sector is lacking a national-level intervention. Neither government nor NHSE has effective oversight of hospices. With much of the demand for care funded by charitable income, and as local boards do not routinely collect granular data from hospices, there is no clarity over what care public funding is paying for.

NHS England has emphasised that it is aware that every hospice provider is worried about financial sustainability, but that it is unaware of any hospices facing immediate closure. NHSE also wrote to the Committee in January asserting that hospices are a priority area and that it is pursuing reform with urgency. The PAC will expect to see clear evidence that this commitment is being delivered.

Sir Geoffrey Clifton-Brown, Chair of the Public Accounts Committee, said: “The mark of a civilised society is how it treats its elderly people, and the services provided by hospices in England could not be more important in that regard. All of us, whoever we are, deserve access to care and in an environment that gives us the best possible quality of life as we approach the end.

“The institutions whose job it is to help ease our final days deserve to have recognition of the central role they play in our health system. And yet government's actions, despite all reassurances to the contrary, are communicating a certain blithe certainty that the sector's challenges will be resolved at the local level.

“We acknowledge the government's insistence that it lacks complacency, but the autumn timelines of the arrival of its current reforms risk ignoring the reality. A funding cliff-edge is approaching in only a month. Details of what these reforms might look like are thin on the ground, but regardless, by the time any help arrives, invaluable services may already have been cut.”

PAC report conclusions and recommendations 

The Department and NHS England do not have effective oversight of the independent hospice sector. Independent hospices save the NHS an estimated 1.5 million bed days and more than ?800 million each year by annually supporting around 20,000 people to die outside hospitals. However, ICBs provide only around ?420 million in total to hospices, which spend around ?1.2 billion a year on care, meaning charitable income funds much of the demand for care. Despite this reliance on the hospice sector, ICBs continue to fund hospices largely through grants and block contracts and have made slow progress towards transitioning to strategic commissioning. They do not routinely collect patient-level activity data from hospices, so cannot readily determine the volume of care services they are buying or the outcomes from that care. This leaves the Department and NHS England with no clarity over what care public funding is paying for or how hospice provision is changing over time.

Recommendation 1. The Department and NHS England should use the opportunity of the Modern Service Framework to:

• define the core palliative care services that ICBs have a duty to commission;
• establish how much of this is delivered by hospices; and
• determine fair levels of ICB funding for hospices.

Only now are the Department and NHS England developing a Modern Service Framework for palliative and end-of-life care, but so far the details are unclear. There has not been a new national strategy for improving palliative and end-of-life care in England since 2008. The Health and Care Act 2022 set out a legal duty for ICBs to commission palliative care services that meet the needs of the local population, but this has not yet delivered equal access to quality services. Hospices are central to achieving government's objectives of providing more care in the community and reducing hospital use, but national oversight of the palliative and end-of-life care system has not kept pace with this policy shift. Hospices have diverged from the NHS in some ways, for example, clinicians in hospices are often paid less than their NHS counterparts. The Modern Service Framework that the Department and NHS England are developing aims to bring together disparate elements of the system, including facilitating ICBs to improve their commissioning of care services from hospices, but its details at present are vague, and its delivery will require clear plans and sustained investment to fix the long-standing problems within the sector.

Recommendation 2. DHSE and NHS England should work with and take on board the views of the hospice sector to develop and publish a fully costed delivery plan alongside the framework.

NHS England has been too slow to enforce a commissioning approach for the provision of palliative care that focuses on the quality of outcomes for patients. ICBs continue to fund hospices largely through grants and block contracts, despite the NHS widely using payment schemes that align payments with incentives and fund on the basis of activity and outcomes.  The Department and NHS England cannot show whether the quality of life for patients receiving palliative care is improving, whether they receive care in the right setting, or that unnecessary hospital stays are being avoided. New tariffs, payment mechanisms and incentives are being developed to align funding with need, and the Strategic Commissioning Development Programme for ICBs is planned to launch in April 2026 alongside guidance through a strategic framework. However, there is concern in the sector that multi-year commissioning models are not being implemented quickly enough given the financial pressures hospices are facing. NHS England is relying on ICBs to address financial problems and drive change in their areas, but NHS England must itself lead the adoption of improved commissioning approaches given the problems are system-wide and very variable, and particularly while ICBs are undergoing significant restructuring.

Recommendation 3. NHS England should set out its plan for supporting all ICBs to adopt a consistent commissioning approach for the provision of palliative and end-of-life care that focuses on high-quality care outcomes for patients.

Too many patients spend their last days receiving palliative care in acute hospitals, which does not always achieve the best outcomes for patients nor represent value for money. Patients are frequently receiving palliative care and reaching the end of their lives in settings they would prefer not to be - in hospitals rather than at home or in a hospice - and which are more expensive. Around one in four adults cared for in acute hospitals are in the last year of their life, accounting for about 10 million bed days each year, when many could be in other settings that are better suited to supporting their needs. Hospices annually support around 20,000 people to die in community settings rather than in hospital, saving the NHS approximately 1.5 million bed days and around ?800 million. NHS England use a dashboard to track patients at the end of their lives across all ICBs, which highlights the significant number of people who need not be in hospitals and would rather be at home.

Recommendation 4. NHS England should explain, in detail, how it will move more palliative and end-of-life care out of acute settings and into the community, and the savings it expects this will deliver.

The Department and NHS England are not responding to the growing financial crisis in the adult hospice sector with the seriousness and urgency needed. The independent hospice sector is facing a serious financial situation that is already affecting patient care. Demand for hospice care is rising, but most hospices are reporting growing deficits, while several have announced cuts to services within the coming months if additional funding is not found. The Department recently provided funding of ?125 million to hospices, but this was non-recurrent capital funding that does not directly fund service delivery or solve the continuing financial problems facing the sector. NHS England expects ICBs to undertake quality impact assessments if a hospice signals reductions in service that the NHS could not cope with. We welcome that, following the session, NHS England wrote to all ICBs requesting immediate, up-to-date assessments of the financial stability of hospices within their footprints and action to mitigate risks. The Modern Service Framework is expected to contain the details and plans for how NHS England will improve how ICBs commission and pay for services from hospices. However, with the framework not set to be completed until Autumn 2026, and then time needed to implement it, including the development of new payment mechanisms, we are concerned that the pace of change does not match the urgency of the situation.

Recommendation 5. NHS England should work with ICBs to:

• establish which hospices are forecasting imminent service reductions and confirm that for each of these, the ICB has undertaken a quality impact assessment; and
• develop an individual plan for each such hospice, setting out how the ICB will support the hospice to maintain its services, or how the ICB will otherwise compensate for the service reductions.

The NHS is at risk of losing the huge value it gains from independent hospices beyond the provision of statutory palliative and end-of-life care. Independent hospices provide enhanced care compared with the NHS, such as complementary therapies, funded from charitable donations. As well as patient care, they provide expert advice and training on palliative and end-of-life care to the NHS. Their independence enables a degree of innovation in care delivery methods that the NHS cannot easily replicate, and they are leading the move to provide more palliative care in community settings. NHS England acknowledges that hospices are a key part of the delivery of neighbourhood care, for example through their provision of 24/7 palliative care advice lines that support communities and help reduce hospital admissions. Hospices are increasingly supporting wider community services, such as care homes and general practice. The financial situation of the hospice sector puts the Department and NHS England at risk of losing this value and having to dedicate resources to replace the lost expertise.

Recommendation 6. The Department and NHS England should ensure the Modern Service Framework will thoroughly examine:

• the full range of wider benefits that independent hospices provide and that the NHS gains from; and
• how the Department will protect and support the provision of these benefits in the future.

Hospice collaboratives have the potential to deliver efficiencies and further raise the quality of care, but their development is lacking central support from the Department and NHS England. Some hospices are working together to form collaboratives within ICB regions, offering opportunities for coordinated planning, shared functions, reduced costs through economies of scale and shared management of financial risk. The NAO reported that seven collaboratives are well established across England, with five at an early stage of development. We received submissions from three collaboratives that described how working in partnership across a region reduced needless duplication, minimised unwarranted variation in care, enabled smarter workforce planning and presented a united voice to the ICB. Collaboratives can help ICBs to more readily assess their areas' overall provision of palliative care and commission services more effectively. NHS England considers the collaborative model to be right for the hospice sector and key to improving care provision.

Recommendation 7. The Department and NHS England should set out what it can do to support hospices to develop existing collaborative operating models to derive as much financial benefit and service improvement as possible, and to implement collaboration in all areas where it is feasible.