A Whitepaper on Integrated Multi‑Year Budgeting, Costing and Income

1. Executive Summary

The NHS is entering a period of significant change in its financial and operational planning approach. The Medium‑Term Planning Framework (MTPF) for 2026/27–2028/29 introduces requirements for multi‑year planning, credible forecasting and integrated operational–financial modelling. These changes move the service away from annual budgeting cycles towards a more strategic, long‑term model.

This whitepaper summarises:

• the current state of NHS planning processes
• the structural changes required under the MTPF and a conceptual model for integrated multi‑year planning
• the gaps between today’s methods and future requirements
• a factual breakdown of what credible forecasting entails
• illustrative examples demonstrating multi‑year planning effects

The aim is to provide an analytical view of the evolving planning landscape and outline the capabilities organisations will need to meet future expectations.

2. Current NHS Planning Landscape

Planning and budgeting practices across NHS organisations are predominantly shaped by annual cycles, local spreadsheet-based modelling and fragmented ownership of key planning assumptions. As a result, operational and financial plans are often produced in parallel rather than as a unified model.

Common characteristics of today’s environment

• Planning cycles are typically structured around an annual timeframe
• Local spreadsheet models are commonly used within divisions, services and cost centres
• Assumptions are developed and maintained across multiple organisational levels
• Activity, workforce and financial plans are often produced independently 
• Operational updates and financial forecasts are refreshed on different timelines
• Updates to planning assumptions are managed through locally defined processes throughout the year

3. MTPF Requirements (2026/27–2028/29)

The MTPF sets out a different approach to medium-term planning, requiring organisations to shift from single-year plans to credible multi-year strategies.

Core expectations include:

• Three- and five-year financial plans aligned with operational priorities
• Forecasting that reflects current performance and expected trends
• Integration of activity, workforce, cost and income assumptions
• Alignment between Trust‑level and system‑level plans
• Increased focus on transparency and traceability of planning assumptions

4. The New Required Process: Conceptual Model

5. Gap Analysis: Today vs Required Future State 

When planning out a new process that complies with the new requirements, it makes sense to compare what has been done to what needs to be done in a gap analysis. We have touched on some of the differences in a more implicit way already in the course of this whitepaper. The following table makes the analysis more explicit.  

Addressing these gaps will require not only improved processes, data foundations and governance, but also a meaningful cultural shift toward shared responsibility and closer collaboration across operational and financial teams.

6. What "Credible Forecasting" Looks Like

Credible forecasting is a core expectation across the MTPF.

NHS planning guidance emphasises that medium‑term plans must be evidence‑based, realistic and underpinned by clear triangulation between finance, activity, workforce and quality. Credible forecasting therefore requires a structured approach that links current performance to forward projections in a transparent and repeatable way.