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23.01.15

NHS faces £65bn hole in finances by 2030 says think tank

The NHS faces a £65bn black hole in its finances by 2030 unless ministers commit to continual above-inflation funding increases, analysis by the Health Foundation has found.

The projection found that the inflation in the health service was likely to increase by 2.9% a year as demand increases and the population ages, compared to an expected 2.3% expected annual rise in GDP.

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Anita Charlesworth, chief economist at the Health Foundation, said: “Our analysis shows health funding pressures will continue to grow beyond the rate of inflation and economic growth.

“The projections from our work show the health funding requirement growing by 2.9% a year over and above inflation if productivity growth continues in line with recent trends. This is higher than the expected annual increase in GDP of 2.3%. It amounts to an additional £65bn needed by 2030-31.

“NHS funding will therefore need to grow slightly faster than GDP. We are calling for the next government to establish a public and political consensus on the longer-term funding levels necessary for the NHS. The next government needs to act immediately in order to secure the future of the health service in years to come.”

NHS England chief executive Simon Stevens forecast a £30bn funding shortfall by 2020-21 in The Five Year Forward View, which set out a series of changes in a bid to improve efficiency.

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Above the additional £8bn that the Forward View identifies as needed, the Health Foundation is arguing that the incoming government needs to establish and resource a ‘transformation fund’ to provide the financial assistance necessary to underpin change; and to commit further annual funding for the NHS above what has already been identified.

A government spokesperson said: “While we welcome debate on the long term future of health finances, given the economic uncertainties with projecting 10 or 15 years out, the NHS’s focus is understandably mainly on the next five years as set out in the NHS Five Year Forward View.”

Andrew Gwynne MP, the shadow health minister, said: “The only way to make the NHS affordable and sustainable in the 21st century is to fully integrate it with social care, as Labour plans.

“In addition, we have committed an extra £2.5bn a year over and above anything we inherit from the Tories. David Cameron has failed to pledge the extra money the NHS needs in the next parliament while the Liberal Democrats have made entirely unfunded plans, the very last thing the NHS needs right now.”

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