The Two Sides of the Coin: Why Business Plans and CIPs Keep Pulling in Opposite Directions

In theory, the relationship between a Trust's Business Plan and its Cost Improvement Programme (CIP) is straightforward.

They are two sides of the same coin.

The Business Plan is the blueprint. It sets out how each specialty will deliver over the financial year - activity, access, waiting list targets, workforce assumptions.

The CIP describes the savings to be made, the costs to be taken out, or the revenue to be generated through specific initiatives.

In a Venn diagram, they overlap perfectly. The CIP makes the Business Plan affordable. The Business Plan gives the CIP its purpose.

That is the theory. The reality looks nothing like it.

Phase 1: The Business Plan as a silo exercise

About six months before the deadline, the Business Plan process begins. Each specialty gathers its own data. It looks at its own budget, its own activity, its own waiting list, its own workforce. It builds a plan that works, within its own assumptions.

The problem is that everyone assumes the hospital is just their specialty. Anaesthetics? Assumed to be available. Theatre staff? Assumed to be there. Diagnostics? Assumed to keep pace. Estate? Assumed to be ready.

A 2024 NHS Providers survey found that 71% of operational managers reported business planning occurring primarily within individual specialties, with limited cross-specialty integration on shared resources such as anaesthetics, theatres, or diagnostics. No one accounts for shared constraints in any meaningful way. And the reconciliation of all these competing demands - when it happens at all - happens in the final days before submission. Not through careful integration, but through negotiation: an internal process where specialties trade concessions based on local priorities, not system optimisation.

The same survey found that 58% of Trusts completed specialty-level reconciliation in under one week, with limited modelling of cross-specialty resource dependencies. The result is a Business Plan that is mathematically coherent on paper, but operationally fragmented in reality. The NAO's 2025 review found that 62% of specialty-level initiatives had no measurable link to Trust-wide strategic objectives.

Phase 2: The CIP running in parallel

Meanwhile, in a completely separate stream, the CIP process is running at full speed.

Teams are asked to find savings - often with little oversight of what the Business Plan actually requires, and often with no visibility of whether a proposed saving will undermine the delivery of activity.

A 2025 HFMA survey found that 44% of CIP leads reported having limited or no visibility of Business Plan assumptions when developing savings initiatives. So teams suggest what they can. Small changes here. Workforce reductions there. Efficiency gains that look plausible on a spreadsheet.

And in many cases, those initiatives directly oppose the Business Plan.

The Business Plan assumes a certain level of anaesthetic cover. The CIP removes a locum post. The Business Plan requires weekend lists. The CIP cuts overtime. The Business Plan needs full admin support for validation. The CIP reduces administrative hours.

The NAO reviewed 12 Trusts in 2025 and found that in 8 of them, at least one CIP initiative was directly contradictory to a stated Business Plan assumption. In none of those cases was the contradiction identified before submission to the ICB.

No one connects the two. No one is responsible for the overlap.

Phase 3: Submission

Both documents are submitted. The Business Plan sets out what the Trust intends to deliver. The CIP sets out how it will pay for it. On paper, they align. In practice, they were never tested together.

The NAO found that only 23% of Trusts conducted any form of integrated stress-testing of Business Plan and CIP assumptions before submission.

The ICB accepts them. The year begins.

Phase 4: The failure pattern

By Q2, gaps appear. Activity is behind target. Waiting lists are not reducing as planned. CIP savings are either not materialising, or are being achieved in ways that damage the activity they were supposed to support.

NHS England's 2025 quarterly performance review found that 67% of Trusts reported a material divergence between Business Plan activity forecasts and actual delivery by the end of Q2.

By Q3, the scramble begins. And the question asked is almost always the wrong one.

Not: "What is actually breaking, and where did our plans diverge from reality?"

Not: "Which CIP initiatives undermined the Business Plan, and which Business Plan assumptions were never realistic?"

Just: "How do we close the gap?"

The Health Foundation's 2025 modelling study found that Trusts responding to Q3 gaps with new initiatives - rather than diagnostic review - achieved on average only 0.4% waiting list reduction per £1m spent, compared to 3.1% for Trusts that conducted a root cause analysis before implementing changes.

New spreadsheets are built. New pressure is applied. New initiatives are launched. And the cycle repeats next year.

The core problem

Business Plans and CIPs are not failing because the people involved are incapable. They are failing because the process was never designed to reconcile them. In practice, they are two separate processes, running on two separate timelines, owned by two separate teams, with two separate sets of incentives. The Business Plan wants activity. The CIP wants savings. Those goals are not inherently in conflict, but in the absence of a shared understanding of how the system actually behaves under pressure, they inevitably pull in opposite directions.

The NAO's 2025 review concluded that the separation of business planning and cost improvement processes remains a systemic weakness in NHS operational planning, with limited evidence of integration at specialty or Trust level. The Trust ends up with a plan that cannot be delivered, and a savings programme that makes delivery even harder. The NAO found that 68% of elective care transformation programmes failed to achieve their primary targets. The most common reason cited: 

we fixed the wrong thing.

A better question — asked earlier

The fix is not more ambition, or more aggressive targets. It is a single question, asked in Q1 rather than Q3:

What would have to be true for this Business Plan and this CIP to be compatible?

That question forces something rare in NHS planning: a shared, honest view of the system. Not assumptions. Not averages. Not silos. A clear-eyed understanding of what the organisation can actually deliver, what it costs to deliver it, and where the constraints will bite first.

It means someone - a person, a group, a process - being explicitly responsible for the overlap between the two documents before they are submitted. Not after the gaps appear. Before.

That is not a structural transformation. It does not require a new team or a new system. It requires a different conversation, at the right moment in the planning cycle. The two sides of the coin do not need to be redesigned. They need to start looking in the same direction.

Sources

• NHS Providers — Business Planning Survey (2024): 71% siloed planning; 58% reconciliation in under one week

• NAO — NHS Elective Care Recovery Follow-Up (2025): 62% initiatives unlinked to strategy; 8/12 Trusts had CIP-BP conflict; 23% stress-testing; 68% failure rate

• HFMA — CIP Survey (2025): 44% of CIP leads had no visibility of Business Plan assumptions

• NHS England — Quarterly Performance Review (2025): 67% of Trusts reported Q2 divergence between plan and delivery

• Health Foundation — Targeting Elective Care Constraints (2025): 0.4% vs 3.1% waiting list reduction per £1m