Corporate report

UKHSA Advisory Board: Finance Report

Updated 12 May 2025

1. 1. Purpose of the paper

This paper gives an overview of the UK Health Security Agency’s provisional financial outturn for the Financial Year 2024-25 (the end of March 2025).

2. 2. Recommendations

The Advisory Board is asked to note UKHSA’s financial position.

3. 3. Summary of 2024-25 financial performance (at end of March)

The table below shows resource and capital departmental expenditure limits (RDEL and CDEL) for 2024 to 2025, split by the parts of:

• core agency costs
• non-Covid vaccines and countermeasures
• the Covid Vaccine Unit.

It shows the provisional outturn for the 12 months April 24 to March 25.

Table 1: Full year resource departmental expenditure limits (RDEL) and capital departmental expenditure limits (CDEL)

	Budget	Actual	Variance
Core RDEL	434,090	430,270	3,820
NBN RDEL	8,730	8,535	195
ODA RDEL	14,759	14,698	61
CVU RDEL	928,100	816,558	111,542
VCR RDEL	658,985	638,606	20,379
Core CDEL	93,898	81,958	11,940
NBN CDEL	8,710	7,007	1,703
ODA CDEL	3.563	1,499	2,064
CVU CDEL	(145,670)	(145,015)	(655)
VCR CDEL	92,099	89,856	2,243
UKHSA total resource	2,044,664	1,908,666	135,998
UKHSA total capital	52,600	35,305	17,295
UKHSA total	2,097,264	1,943,971	153,293

3.1 Core Resource budget

The provisional outturn shows an underspend against budget of £3.8million. We have been working in collaboration with Department for Health and Social Care (DHSC) colleagues to utilise the budget headroom that emerged across the health group finance position at the end of the financial year. We agreed a number of actions that increased our expenditure in the final month which recognised pressures which had emerged and brought forward planned spend from 2025/26 with DHSC providing additional budget cover.

The provisional underspend on our Core resource allocation is less than 1%. This is a key measure which we are held accountable to by DHSC and HM Treasury.

3.2 Core Capital budget

The provisional outturn is to underspend by £11.9million, missing our targets by 13%. Spend from major projects had been planned to be delivered in the final quarter of the year however this fell below plan. A particular area of underspend was in maintaining laboratory estates where delivery did not go ahead as planned on Autoclave updates and asbestos removal work slipped into 2025/26. Additional budget was received to deliver antimicrobial resistance systems upgrades, Cyber compliance and Technology network improvements and this was delivered in full.

3.3 Covid Vaccine Unit Resource and Capital budget

The Covid Vaccine Unit (CVU) provisional outturn is £112million below budget. Demand modelling through the year identified that the budget allocation set out at the last spending review will not be utilised and an underspend position has been declared. DHSC has been consulted throughout the year on CVU, and the outturn reflects the position agreed with the Department. The provisional outturn has been updated for the calculation of stock required to deliver the Spring and Autumn 2025 campaigns with minimum order quantities received from the NHS and Devolved Administrations. Vaccines which are currently held in stock above requirements have been impaired in 2024/25.

The capital credit outturn is generated by purchases from contracts agreed in the previous financial year and delivered in 2024-25. When the vaccine is received, a credit scores against this budget line.

3.4 Vaccines and countermeasures resource and capital budget

This is a demand led budget and UKHSA is currently undertaking work to better utilise data to improve forecasting and drive efficiencies.

4. 4. Business Planning 2025-26

We have concluded the business planning round for 2025/26. The core resource budget is £430.8million with allocations agreed for groups. This is an increase from the 2024/25 initial settlement of £395million to maintain our core capabilities.

The core capital budget for 2025/26 is £130.3million. This is an increase from the 2024/25 initial settlement of £88.9million. The provisional outturn for 2024-25 highlighted the slippage in planned spend in the final quarter of the year. While March alone had spend over £20m, planning for 2025-26 has addressed the risk of spend planned mainly in the final quarter of the year. To improve our capital delivery planning we have given groups early capital allocations which has brought forward the ability to plan spend by three months compared to 2024-25. A more even profile of spend is already in place for 2025-26 and in-depth review sessions are planned with delivery leads during the year.

5. 5. Spending Review Phase 2

The Spending Review remains the biggest risk to the agency. A ‘low scenario’ outcome would be a spending reduction equivalent to removing our regional frontline health protection teams in their entirety.

DHSC have now submitted all returns for the second phase of the Spending Review to HM Treasury (HMT). Three scenarios were submitted in total for the Core resource budget. Two of the scenarios were requested by HMT which were based on flat cash and a 2% year on year reduction from the 2025/26 settlement. The expectation in both of these scenarios was that inflationary pressures including pay rises were absorbed. The third scenario was an increase in the Core resource budget in line with the GDP deflator. This scenario would still require efficiencies to made and to increase income generation due to higher than inflation pay rise guidance.

Across the three scenarios submitted there was only one profile included for Cyber Security, delivery of Covid and Non-Covid Vaccines and the Core capital programme.

The Core capital programme did not include any proposed reductions from the 2025/26 settlement. The replacement laboratory programme submission was based on delivering at the Porton site whilst seeking additional funding from HMT to deliver the Harlow option.

6. 6. Annual Report and Accounts

UKHSA has completed its first ever interim audit which will support the earlier laying of the accounts in November 2025 and establishes the reporting cadence for earlier laying in future financial years.

The interim audit has progressed well, 95% of sample evidence has been provided and the main work is completed, with the small exception of leases which will complete later in the audit period.

Fixed assets position has improved from the prior year with all prior year audit adjustments in the Fixed Asset Register now complete.  There is still significant work ongoing including, notably providing National Audit Office assurance that assets exist and can be verified. This requires asset owners in the business to engage which has been slower than needed to date, and which may introduce additional write offs that are not factored into the closing position if the assets are not in existence.

The Call off Contract evaluation has completed and a supplier selected to support UKHSA for the 2024-25 Accounts close.  The focus of the support is changing this year to implementing the longer term improvements to processes and development of skills.

Good progress has been made in respect of Covid vaccine campaign modelling with cross – functional support from eh Commercial, Vaccines and Countermeasures Delivery team supporting the agreement of partial commitments from Devolved Governments.

We continue to work closely with DHSC Finance colleagues on the Group account and we are currently on plan for delivering an un-disclaimed account, certified in October and laid in November.

Luke Heath

Director, Finance, Performance, Risk & Assurance

May 2025