Hospices rely on strong community support, charitable funding and a commitment to delivering compassionate end-of-life care. Demand for services continues to grow, costs are still rising, workforce shortages remain a concern, expectations from patients and families are evolving, and most of all, the financial climate remains a significant challenge with a lack of government funding. Many hospices may feel they are operating in an increasingly complex and pressured environment that is almost at breaking point.
According to Hospice UK, around 300 hospice inpatient beds in England were reported as closed in the last 18 months, deregistered or out of use due to funding and staffing pressures. This is in addition to nearly 60% of hospices reporting to have made or been planning cuts to patient services in 2026. In September 2026, Channel 4’s research paper identified that Hospices in England and Wales were facing a £745 million funding gap.
During 2025-2026, we have already heard of unfortunate hospice closures due to this unsustainable model. Hospices have been reducing services, closing inpatient beds and reshaping operating models.
Trustees are no longer simply dealing with how to manage annual financial pressures, but whether the existing model remains fit for the future. An important question consequently emerges: are hospices approaching a strategic crossroads? A critical turning point requiring hospices to make defining decisions. While the sector remains resilient, many hospices are being forced to consider fundamental questions about how they operate, how services are delivered and how they will remain sustainable.
Financial sustainability
Hospices rely heavily on a combination of charitable donations, fundraising activities, legacy income and statutory funding. This model has served the sector well, however, recent years have exposed its vulnerabilities.
Rising salary costs, inflationary pressures and increasing operating expenses have placed pressure on budgets. Many hospices have also experienced fluctuating fundraising income as economic uncertainty affects both individual donors and corporate supporters. Legacy income continues to be a vital source of funding, but the timing and value of legacies can be difficult to predict. This can create significant volatility in annual financial results and long-term forecasting. Our article on hospices and legacy planning considers opportunities for boards to explore through legacy endowment funds.
The challenge is not necessarily that the model is broken. Rather, hospice leaders must consider whether the balance between fundraised income and government support remains appropriate for the demands being placed on hospice services.
As a result, boards need to give increasing attention to long-term financial resilience, diversification of income sources, cost management, and the development of more sophisticated financial planning models, themes explored further in our article on managing financial sustainability in hospices.
The hospice model
Many hospices now deliver a significant proportion of their services within community settings, supporting patients to remain in their own homes for as long as possible. Digital consultations, outreach services and integrated care pathways are becoming increasingly common. This shift reflects wider changes across healthcare, where there is an emphasis on providing care closer to home and reducing unnecessary hospital admissions. In turn, the cost of running inpatient units is growing, and in many hospices, beds are not fully utilised due to the specialist staff skillset needed, as well as the number of staff per bed.
Boards may need to consider whether existing facilities, operating models and resource allocations remain aligned to how care will continue to be delivered.
Data and technology
Digital systems can help hospices better understand demand, improve operational efficiency and support service planning. Advances in data analytics can provide valuable insight into patient needs and service utilisation, while technology-enabled fundraising can help maintain engagement with supporters. Data analytics in retail shops can really help understand performance, footfall and results, allowing decisions to be made sooner rather than later.
Emerging technologies may also offer opportunities to streamline administrative processes and reduce some of the pressures on staff. However, technology should be viewed as an enabler rather than a solution. Alongside these opportunities comes increased responsibility around cyber security, data protection and digital governance, all of which require active board oversight. Successful hospices will be those that adopt technology strategically.
Collaboration
One of the most significant shifts in the hospice sector over recent years has been the growing recognition that no hospice can solve every challenge alone. Hospices have developed identities rooted in their local communities. However, current challenges are prompting many boards to reconsider where greater collaboration could strengthen long-term sustainability to achieve a common goal. Importantly, collaboration should not be viewed through the lens of merger or acquisition, but there are opportunities for hospices to work together.
By sharing resources and expertise, hospices may be able to reduce duplication, improve efficiency and redirect valuable funds towards patient care.
The following examples illustrate how hospices could collaborate in practice.
- Shared finance, HR and IT functions.
- Joint procurement arrangements.
- Collaborative fundraising initiatives.
- Shared clinical leadership roles.
- Joint education and training programmes.
- Shared specialist resources and expertise.
- Collaborative retail operations.
- Joint ventures with NHS partners and integrated care systems.
For some hospices, collaboration may ultimately lead to more formal integration through a merger or acquisition. Attitudes appear to be evolving on this topic as boards face increasing pressure to demonstrate financial resilience and service sustainability, concluding that greater scale offers advantages that cannot be achieved independently.
We have explored a collaborative initiative in our article Better together: Why charitable hospices and care homes should join forces, which looks at how two service areas within the healthcare system can gain efficiencies and longer-term benefits.
The key question for boards is not simply how to survive, but how to ensure their hospice remains sustainable, relevant, and capable of delivering high-quality end-of-life care into the future.
Exploring opportunities
Opportunities for income generation may include expanding retail operations while reviewing the existing base of poor-performing units, developing commercial partnerships, increasing fundraising innovation, growing legacy giving programmes, and exploring opportunities to deliver commissioned services. At the same time, hospices can identify cost-saving measures through shared procurement, collaborative working arrangements as noted above, digital transformation, and the rationalisation of back-office functions.
Equally important is the effective utilisation of resources. This may involve reviewing estate usage, deploying clinical and support staff more flexibly, increasing volunteer engagement, and collaborating with neighbouring organisations to share expertise and specialist services.
Hospice leaders and boards need to continue thinking outside the box to ensure the risk of a missed opportunity is not avoided.
Governance and leadership
Trustees and executive teams are increasingly required to make decisions in an environment of uncertainty and competing priorities. Balancing financial sustainability, workforce pressures, service development and strategic growth is rarely straightforward. As a result, boards may need to spend less time focused solely on operational performance and more time considering long-term strategy.
Many hospices have already begun reviewing board composition to ensure they have access to expertise across areas such as finance, healthcare, technology, risk management and organisational transformation.
Boards that encourage constructive challenge, long-term thinking and open discussion are likely to be better positioned to respond to future pressures. There are a few questions worth asking.
- What will demand for our services look like in two to five years' time?
- Is our funding model resilient enough to support future growth?
- Do we have the workforce required to meet future needs?
- Are there opportunities to collaborate more effectively?
- Does our current operating model remain fit for purpose?
- Do we have the right skills and experience around the board table?
The answers will differ for every hospice, but the importance of asking these questions is universal.
Looking ahead
Hospices that will thrive are likely to be those willing to challenge assumptions, embrace innovation, strengthen partnerships, collaborate effectively and think strategically about their future in the wider healthcare system.
The sector is not facing a crisis of purpose; its mission remains as relevant today as it has ever been.
What it may be facing, however, is a strategic crossroads. The decisions made by trustees and leaders over the coming years could shape not only the future of individual hospices, but the future of hospice care itself.
Crowe UK is at the forefront of advisory services to the hospice sector around financial management, governance, change transformation, strategic planning, risk and reserves, mergers and acquisitions, compliance, and reporting. We are here to support and guide the hospice sector.
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