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08.11.16

Major think tanks issue stark warning over NHS finance ahead of Autumn Statement

Three major health think tanks have issued an urgent warning ahead of the Autumn Statement that it will be difficult to achieve NHS sustainability and transformation in light of current financial pressures.

In a joint briefing, Nuffield Trust, the King’s Fund and the Health Foundation said that total health spending in England will rise by £4.2bn from 2015-16 to 2020-21, not the £10bn promised by the government.

The actual increase will be 0% in 2018-19 and 0.3% in 2019-20, which the briefing said would not be enough to maintain current standards of care and meet rising demand, let alone transform services and implement seven-day care.

John Appleby, director of research and chief economist at the Nuffield Trust, said: “After years of austerity, by the middle of this parliament we will start to see the amount of NHS money per person actually fall in real terms.

“In this context, providing high-quality healthcare that meets the needs of a growing and ageing population will put the NHS under enormous pressure. We are likely to see this expressed through an explosion in waiting lists, patients being denied new drugs, or hospitals going even further into the red. These would neither be desirable for patients nor for the government: action is needed.”

The briefing added: “The huge pressures now being felt right across the health and care system mean that the pace of change required to deliver £22bn of savings by 2020-21 is unrealistic.”

While some providers have now been able to reduce their deficit, the think tanks argued that it was “too soon” to say that the financial pressures had eased, and stressed that trusts are still facing an end-of-year deficit of £580m.

Of the £2.1bn currently available through the sustainability and transformation fund, £1.8bn is due to go to reducing provider deficits, and the report also warned that the £508m promised for one-off sustainability and transformation investments in general practice would instead go to maintaining services.

Although the NHS has delivered productivity improvements of around 1.4% a year for the past decade, the report said that easier options had “been exhausted”.

It added that further efficiency savings would be harder to make without an engaged workforce. Since the NHS is capping employees’ pay rises at 1%, the report suggested it would be harder to maintain employee morale, especially if the cost of living increases.

The think tanks argued that the government should “address the additional NHS funding settlement in future financial statements”, or else politicians should “be open with the public” about how services would change without additional funding.

They also called on the Department of Health to bring forward the Better Care Fund investment in social care in the Autumn Statement, saying increased investment in social care was needed to relieve the pressures on the NHS.

Anita Charlesworth, director of research and economics at the Health Foundation, added: “On too many occasions over the last few years the approach to funding for the NHS and care system has been to rob Peter to pay Paul.

“Social care cut to protect the NHS, budgets to train new doctors and nurses reduced to fund care now, capital budgets raided to meet day-to-day costs. It is absolutely clear that this is not sustainable and has undermined the drive to improve efficiency. While the pressures on the health service are very real, the case to prioritise social care funding in the Autumn Statement is compelling.”

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