NHS funding increase needed as financial crisis looms

The NHS inevitably faces a ruinous financial crisis by 2015/16 unless it receives a significant financial injection, according to a new report.

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The NHS inevitably faces a ruinous financial crisis by 2015/16 unless it receives a significant financial injection, according to a new report from The King’s Fund.

With more than a quarter of trusts already in deficit, the report, entitled The NHS productivity challenge: experience from the front line, warns that a financial crisis would have devastating consequences for patient care.

“It is now a question of when, not if, the NHS runs out of money,” said John Appleby, chief economist at The King’s Fund and lead author of the report.

“Without significant additional funding, this will lead to rising waiting times, cuts in staff and deteriorating quality of care.”

Analysis conducted for the report shows that the NHS budget, already under huge strain, is expected to degrade further with the introduction of the Better Care Fund in 2015/16. This will see an additional £1.8 billion in NHS funding diverted to support joint working with social care.

In the long term, the report finds that on current projections NHS spending as a proportion of GDP will fall to 6 per cent by 2021, its lowest level since 2003.

“It is essential that politicians from all parties are honest about the scale of the financial pressures facing the NHS and initiate a public debate about the long-term sustainability of the health and social care system before, not after, the general election,” added prof Appleby.

Cost reduction strategies pursued by the government, such as holding down salaries, reducing the prices paid to hospitals and cutting management costs, have now almost been exhausted, the report finds.

Crucially, The King’s Trust argue that any new funding should not merely be used to disguise the need for change by propping up unsustainable services, but should be invested more shrewdly.

New funding, it states, should be aimed at establishing a health and social care transformation fund to meet the costs of service changes and invest in developing new models of care outside hospitals.

It also recommends emergency funding should be made available to provide temporary support for otherwise sound NHS organisations experiencing difficulties as a result of the unprecedented pressures on their budgets.

Key ways to improve efficiency, the report adds, include a stronger national focus on collating and sharing methods of good practice and applying greater emphasis on encouraging frontline staff to identify and lead changes in clinical practice.

It further identifies the need for stronger leadership at a regional level to plan and implement changes to services across large areas, together with  a more sophisticated and incentivising approach to paying hospitals and NHS organisations.

To avoid the forecast collapse, the government must urgently prepare a fresh funding package and consider its options for efficiency savings that will not harm the delivery of care or further undermine staff conditions.

One Response to “NHS funding increase needed as financial crisis looms”

  1. Hannah

    If the NHS is about to run out of money, why does the Treasury pocket billions in underspend from health services each year? Manufactured deficit?

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