Over the past decade, independent sector providers have become an increasingly important part of the national effort to cut NHS waiting lists. The latest analysis from the Independent Healthcare Providers Network (IHPN) shows that private providers now deliver around 10% of all NHS elective care, and that independent capacity has been central to recent reductions in long waits.
It is against this backdrop that concerns (set out in a recent Health Service Journal article) have been raised by both NHS commissioners and independent healthcare providers that the proposed 2026/27 contract rules for elective care will be a ‘barrier’ to recovery and a ‘disincentive’ to shift care from hospital to community.
NHS England’s consultation on the draft 2026/27 contract closed last month, with the final version due to be published shortly. The updated terms will apply to all new contracts from April 2026 and will also automatically apply to any existing contracts that roll over into the 2026/27 financial year - without the need for a separate contract variation.
With the Government committed to restoring the 18 week referral-to-treatment (RTT) standard by the end of this Parliament, the NHS faces pressure to accelerate elective activity. Yet reports from IHPN and some NHS groups suggest that the current contracting approach - centred on Indicative Activity Plans (IAP) and Activity Management Plans (AMPs) is likely to slow recovery. Many IHPN members report they have already been instructed to scale back activity.
The Health Service Journal reports that NHS Providers’ CEO Daniel Elkeles warns that IAPs will directly constrain trusts’ ability to meet RTT ambitions: “IAPs will be a barrier… rather than an incentive.”
NHS England’s draft 2026–27 contract removes the escalation process previously available to providers for challenging commissioners’ use of IAPs and AMPs. Instead, if commissioners fail to adhere to the technical guidance, providers must now rely on the standard dispute resolution procedures and, if necessary, pursue legal action for breach of contract.
While these changes do not alter the principle that providers should be paid according to their actual activity levels, they significantly reduce providers’ ability to influence commissioner expectations to ensure there are sufficient resources in place to meet anticipated demand.
If you’d like to discuss any of the issues raised here, do contact Gayle Curry.
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