The problem
A major stumbling block for neighbourhood healthcare is failing to align funding with the new, integrated model of care. The NHS’s current financial structures are built around siloed services and short-term budgets, not the cross-sector, resident-centred approach that neighbourhood healthcare demands.
Without reform, funding remains fragmented, making it difficult to support digital infrastructure, incentivise collaboration, or sustain long-term transformation. This risks undermining even the best-designed neighbourhood healthcare initiatives.
Why funding matters
The need to reform funding structures is important for a number of reasons:
- Fragmented budgets: Money is still tied to individual services or providers, discouraging collaboration and perpetuating inefficiencies.
- Short-term thinking: One-off or annual budgets make it hard to invest in digital infrastructure, workforce development, or service redesign.
- Lack of incentives: Providers aren’t rewarded for working together or for delivering better outcomes, especially for complex or underserved populations.
- Barriers to technology adoption: Without dedicated funding for implementation, training, and change management, digital tools can’t reach their full potential.
The solution: funding reform for neighbourhood healthcare
To make neighbourhood healthcare work, funding must follow the resident’s journey, not organisational boundaries. That means:
- Recurrent and multi-year funding: Sustained investment in digital infrastructure, workforce, and service transformation.
- Cross-sector collaboration: Pooled budgets and shared accountability to incentivise collaboration across NHS, local authorities, voluntary, and independent providers.
- Outcome-based incentives: Rewarding providers for quality and impact, not just activity.
- Technology enablement: Dedicated funding streams for procurement, implementation, and ongoing support of digital platforms.
What next
To avoid the funding trap, NHS England and the Department for Health and Social Care should:
- Commit to a new financial framework: Pay providers for the level of care delivered to each resident, tracked via a universal identifier.
- Accelerate procurement of digital platforms: Ensure all providers can access and contribute to a single, informed resident view.
- Clarify accountability: Define who controls funding decisions and how success is measured.
- Support non-NHS providers: Enable secure use of resident identifiers and fair payment structures for all contributors to neighbourhood health.
To find out more information on how to deliver neighbourhood healthcare, read our whitepaper Neighbourhood health now: the digital roadmap for delivering neighbourhood services today.