Overview: Key Announcements and What to Watch 

The leaked announcements originally analysed in this blog have since been confirmed in the published 10-Year Health Plan, published on July 3, 2025, with the exception of the suggestion that the Plan would prioritise delivery of the Government’s milestone on the elective backlog in the first three years, before enacting the more radical proposals included in the Plan in the following seven years. This emphasis appears to have been removed during the drafting process, along with an intended chapter entitled "Change Begins," which reportedly would have focussed on the immediate tasks associated with delivery.

The published Plan moves away from automatic funding increases, prioritises productivity, prevention, and digital adoption, and fleshes out some of the previously announced changes to NHS structures and incentives. Highlights include financial restructuring, funding reforms, new operating model reforms, new workforce contracts, and a focus on AI. 

1. Financial Restructuring 

The 10-Year Health Plan targets the health system’s financial deficits, aiming to end the assumption of “more money being the answer to everything.” All providers will be expected to deliver surpluses by 2030, with the £2.2 billion deficit support funding being redistributed into general allocations. This means that any Trust still in deficit by 2030 (of which there are currently 136) will have to achieve financial sustainability independently. 

The Plan also reiterates the 2 % year‑on‑year productivity target for the next three years and requires every organisation to publish a realistic five‑year financial plan.

What this means for public service leaders: 

NHS providers should develop medium-term financial plans and identify cost improvement projects that ensure they achieve financial sustainability by 2030. Achieving this will require robust financial modelling, cross-system collaboration, and data-driven management approaches that integrate financial, clinical, and operational strategies. Executives and Boards should establish clear oversight and early warning mechanisms to monitor progress against deficit reduction or identify potential deficits before they become critical. 

2. Value-Based Funding 

Alongside the changes to deficit funding, the 10-Year Health Plan sets out substantial changes to financial incentives. The proposed changes (year-of-care tariffs, changes to emergency care contracts, and a “patient power payments” system) explicitly move NHS England towards Value-Based Healthcare (VBHC) principles - where patient experience and outcomes are the focus instead of hospital activity. 

According to HSJ reporting, the Plan tests year-of-care tariffs from 2026, providing single payments across hospital and community services. This is reminiscent of the “bundled payment” models deployed in value-based systems, like Sweden, where funding is given to cover the full pathway of patient care. 

Emergency care funding is reported to undergo a similar transformation, moving away from the pandemic-era block contracts. The proposed replacement model would make approximately half of urgent and emergency care (UEC) funding contingent on delivering "safety and quality" metrics - such as the four and 12-hour wait times targets - and successfully shifting care to "neighbourhood health" settings. The Department of Health and Social Care would directly determine about 70% of this tariff structure, while Integrated Care Boards would shape the remaining 30% focused on neighbourhood health elements. This new funding structure draws on the principles of value-based procurement, which divides payments into product, process and patient elements. 

The 10-Year Health Plan also proposed a "patient power payments" system, where providers would potentially receive full payment only when patients report satisfactory experiences or outcomes. Patients would be contacted several weeks after treatment and asked if the full price for their care should be paid to the provider. This takes a similar approach to the one adopted by Wales - where patients would be contacted through an app or digital portal and asked to complete Patient Reported Experience Measures (PREMS) or Patient Reported Outcome Measures (PROMs) - with the Plan mandating collection of PROMs and PREMs universaly through the NHS App by 2029.

Other value-based healthcare measures included in the Plan include value-based procurement for devices and digital products, new powers for the National Institute for Health and Care Excellence (NICE) to withdraw treatments that are no longer cost-effective and expand their technology appraisal process, and the introduction of a Patient Choice Charter and easy‑to‑read league tables to let patients compare providers' outcomes and feedback via the NHS App.

What this means for public service leaders: 

The funding reforms in the 10-Year Health Plan seem to signal a shift toward VBHC principles in NHS England - where resources are distributed to achieve better outcomes and experiences for patients. NHS leaders can learn from the experiences of other VBHC healthcare systems, including NHS Wales, particularly on collection of PREMs/PROMs after discharge, value-based procurement approaches, and how systems can leverage this data to drive improvement. To truly be effective, these shifts will also require healthcare leaders to explore multi-professional collaboration and system-wide working. 

The changes to UEC funding mean that NHS organisations will be rewarded for rethinking how they improve productivity and hospital discharge. Our recent roundtable on UEC transformation discussed how achieving this requires building integrated multi-disciplinary teams, data-driven discharge management, comprehensive tracking systems that measure prevented admissions and health outcomes, and partnership working that expands community care services. These transformations have already been shown to reduce costs, but will now also yield higher income, under the new funding regime. 

3. Organisational Restructuring 

In addition to the previously announced abolishment of NHS England, the 10-Year Health Plan is reported to outline significant restructuring of local health governance, with elected mayors gaining expanded powers in local health decision-making. This includes mayors replacing provider and local authority representatives on ICB boards, influencing ICB chair selection and receiving the oversight functions currently undertaken by Integrated Care Partnership boards and Local Authority health scrutiny committees, which will be abolished. 

The Plan allows the highest-performing Foundation Trusts to become “integrated health organisations,” managing entire healthcare budgets for local populations. ICBs will be told to use competition where appropriate, implement more robust contracting and seek to procure "neighbourhood health services" from both NHS and non-NHS providers. The Government also wants to make more use of the private sector to expand access to healthcare in deprived areas. The 10-Year Health Plan includes an ambition that, by 2035, every NHS provider should be a Foundation Trust.

The outcome of Dr Penny Dash’s review into patient safety organisations is also expected to be announced alongside the plan. This follows the announcement last week that the government is closing several national patient watchdogs, commissioning support units, and 150 local Healthwatch organisations, with ICBs expected to take on their current responsibilities. 

What this means for public service leaders: 

ICBs must prepare for new lines of accountability and anticipate changes in partnership working, especially with local government, regional authorities and the private sector. Board-level engagement and communication strategies will need to adapt to new oversight and reporting lines. 

Similarly, Trust leaders will need to be nimble in how they adapt to this new environment. All providers should develop strategies for demonstrating value and building collaborative relationships in an environment with increased competition and private sector involvement. They will also need to build alternative routes for engaging with ICBs. High-performing Trusts have new opportunities but will need to balance them with the additional capacity and transformation required to deliver them. 

4. Workforce Reform 

A new "opt-in" employment contract will offer performance-based bonuses and ultra-flexible working, enabling more virtual and remote employment and supporting seven-day working patterns. According to leaked drafts of the 10-Year Health Plan, this new contract includes bonus payments based on productivity improvements, care quality enhancements, or contributions to research and service development. The contract appears to be aimed primarily at Agenda for Change staff groups, which include doctors, nurses, allied health professionals, support staff, and most managers. 

Other workforce reforms in the Plan include the requirement for all employees to have a personalised career-coaching and development plan, a reduction in international recruitment to less than 10% of the workforce by 2035, and the introduction of an explicit target to reduce NHS England's sickness-absence rate.

What this means for public service leaders: 

The new workforce model requires careful planning and communication to ensure equitable implementation while protecting psychological safety. HR and operational leaders should begin scenario planning to understand the financial, cultural, and operational implications of these contracts. Particular attention should be paid to how performance metrics are balanced with quality and safety measures and how they can be implemented in a way that encourages staff to admit mistakes and provide feedback without fear of punishment. 

5. Digital and AI Transformation 

The 10-Year Health Plan is placed significant emphasis on digital and AI adoption as central drivers of transformation. According to HSJ reporting, the Plan repeatedly mentions AI-driven tools as transformative solutions, particularly highlighting Ambient Voice Technology (AVT) which would be used to automatically transcribe clinical consultations, reducing the administrative burden on staff. 

AI will also be embedded into the NHS App, which is positioned as the "digital front door" for patients - envisioned to function as an AI-powered GP. Other features planned for the NHS app include assisting with care decisions, enabling remote consultations, helping manage long-term conditions, organising health preferences, tracking medications, and storing health data. 

The Plan confirms the introduction of a single patient record (SPR) and proposes new digital initiatives, such a “HealthStore” for approved digital therapeutics, single sign‑on for staff, and a platform for remotely monitoring patients and creating care plans.

What this means for public service leaders: 

To be most effective, this digital transformation will need to go beyond technology procurement, requiring changes in clinical processes and staff behaviour. Public service leaders must ensure that digital investments deliver real productivity and patient experience benefits. AI is a particularly exciting opportunity to provide immediate value (e.g. through generating clinical notes automatically), but will need to be balanced against potential risks - especially to patient safety. Trusts have already been warned against adopting non-compliant AI tools. 

Navigating Change with Insight and Experience 

The 10-Year Health Plan’s success will hinge on how well NHS leaders can translate high-level policy into practical, locally-owned solutions. This means building improvement capability, fostering genuine partnership across sectors, focussing on scenario planning and challenging traditional metrics to focus on what matters most to patients and communities. 

The PSC will continue to provide analysis, practical insights, and support to help organisations and public service leaders navigate this period of unprecedented change. For further discussion or to access our latest resources, contact us at hello@thepsc.co.uk or sign up for our newsletter. 

This analysis was conducted by David Chappell based on the Health Service Journal’s reporting of leaked drafts of the UK Government’s 10-Year Health Plan. This blog has been updated (13:30 on 3 July 2025) to incorporate the details of the approved 10-Year Health Plan, published on 3 July 2025.

The PSC will publish subsequent analysis of the 10-Year Health Plan. Follow us on LinkedIn for updates.