Report on hospice funding finds commissioning of services is ‘not fit for purpose’

In August 2023 the All-Party Parliamentary Group (APPG) on Hospice and End of Life Care began collecting evidence around the state of funding for the hospice sector. We shared evidence with the APPG and outlined the difficult funding situation that we face, as well as how the lack of fair funding makes it harder to address other important issues including workforce shortages and tackling the inequality in access to palliative and end-of-life care (PEoLC).  

On average, hospice services receive one-third of their overall funding from the Government via the NHS. However, the funding received hasn’t risen in line with increasing costs like energy bills and increases in staff pay to keep pace with NHS pay. Despite the Government setting the annual NHS budget, day-to-day responsibility for planning and paying for services sits with local NHS structures (Integrated Care Boards), many of whom are facing severe financial difficulty themselves. This can make it quite unclear who is ultimately responsible for making sure that PEoLC services receive the funding increases they need to deliver essential care.  

The APPG report concludes that the way hospice services are commissioned in England is ‘not fit for purpose’ and funding often does not reflect the true cost of care. 

We hope this Inquiry will draw attention to the issues the hospice sector is facing and the steps that need to be taken to improve PEoLC. 

The APPG report contains recommendations for the UK Government, NHS England (NHSE) and Integrated Care Boards (ICBs):  

For the UK Government:

• Produce a national plan to ensure the right funding flows to hospices.  
• Work to understand the costs of providing different models of PEoLC. 
• Set out a national minimum standard for the level of provision of PEoLC that must be provided within all ICBs.  
• Provide emergency funding to pay increased staffing costs and consider the impacts on the hospice sector when the NHS pay review is undertaken each year. 

For NHS England:

• Support for ICBs to implement the NHSE guidance on commissioning PEoLC. 
• Hold ICBs accountable for their commissioning of PEoLC.  
• Provide guidance to ICBs on how to commission voluntary sector hospice services. 

For Integrated Care Boards (ICBs):

• Ensure the prominence of PEoLC in joint strategic needs assessments (assessments of the current and future health and social care needs of local communities) and that this informs their commissioning decisions.   
• Ensure that hospices are on multi-year contracts.  
• Ensure uplifts to hospice contracts are equitable with uplifts received by NHS-run services and other hospices in the area.  
• Ensure voluntary sector partners have a named senior contact within the ICB who has responsibility for commissioning in their area.  

Heidi Travis, Chief Executive of Sue Ryder, said: 

“We support the recommendations from the APPG Inquiry on hospice funding. We believe these recommendations are essential in working to secure a sustainable hospice sector that is well-equipped to provide high-quality palliative and end-of-life care to everyone who needs it, both now and in the future. 

“We urge the Government and healthcare leaders to implement these recommendations in full. Without taking these steps to address systemic problems faced by the hospice sector, there is a serious risk the sector will collapse, and patients and their families will lose out on the specialist, holistic support provided by hospices.  

“Currently, on average, just one-third of hospice funding comes from the Government with the rest of hospice revenue coming from fundraising efforts. This is not a financially sustainable model. The hospice sector is a vital part of the health and social care system and provides support to thousands of people and their families each year.  Hospice closures will result in the overstretched NHS, which would then have to provide end-of-life care services. This will result in an estimated additional cost of £484 million each year, on top of what is already being spent by the Government on funding the independent hospice sector. (1). 

“It is clear that no more time can be wasted, the Government and healthcare system must act now.” 

* Integrated Care Boards (ICBs) are NHS organisations responsible for planning health services for their local population. There is one ICB in each ICS area. 

** Integrated Care Systems (ICSs) are local partnerships that bring health and care organisations together to develop shared plans and joined-up services. They are formed by NHS organisations and upper-tier local councils in that area, they also include the voluntary sector, social care providers and other partners with a role in improving local health and wellbeing. There are 42 ICSs in England.