Hospice 'can't make ends meet' with £1.7m shortfall

A Sheffield hospice has warned it is facing a £1.7m shortfall and must break even over the next financial year.

St Luke's Hospice says it is "now running a very lean operation" and is struggling after four years of losses.

It says despite "amazing generosity" from members of the public, it has not been enough to enable St Luke's to "make ends meet" in recent years.

An annual report by the hospice says: "Our reserves are now running too low. It is imperative that we return to annual and sustainable financial surplus in the very near future."

The hospice's running costs were about £15.5m in 2025/26 but its deficit is predicted to have increased by 70% to about £1.7m.

St Luke's - which has provided end-of-life care for 55 years - says most of its costs related to staff, with considerable pay inflation and National Insurance increases in recent years.

There have also been major increases in the cost of food, energy and medical supplies.

"All our essential costs have increased at a far greater rate than our funding has increased," says the report.

"For the fourth year running we are reporting a significant financial deficit.

"We hold reserves of cash and investments to help us absorb fiscal challenges however, the public do not donate millions of pounds each year to just be put in the bank, they rightly expect their hard-earned money to be spent on excellent patient care.

"Our financial reserves have therefore been kept relatively low in order to maximise the impact of donations and to meet the large and rising demand for our palliative care services."

The board of trustees says the budget must break even for 2026-27 and this is a "pivotal moment" for St Luke's.

The report adds: "It will not be easy and will require continued growth in our fundraising and retail income, and a reduction in our cost base.

"Around £1m of annual costs have been removed through a combination of eliminating inefficiencies, renegotiating contracts, not renewing fixed-term contracts and strategic initiatives. We are now running a very lean operation."

Three quarters of income is generated through a combination of gifts in wills, fundraising, donations, its lottery and charity shops.

The report adds: "The public of Sheffield have stepped up time and time again to support St Luke's and enable us to continue to provide both the quality and scale of our vital services.

"However, even this amazing generosity has not been enough to enable St Luke's to make ends meet in recent years."

The hospice sector nationwide is facing a funding crisis but historically core NHS funding for St Luke's has been below the national and regional average for other large adult hospices.

The hospice says, following many months of negotiation, it has agreed a new five-year NHS contract which includes small annual uplifts in funding.

It will help the hospice budget for the coming year but "does not solve its financial problems".

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