NHS faces biggest financial challenge of its history
pharmafile | June 10, 2009 | News story | |Â Â NHS, healthcareÂ
The NHS is hurtling towards the most severe financial shortfall of its history, and faces an austere future of cutting funds and tough spending choices.
A report from NHS managers says the service will not survive the deep economic downturn unscathed, and faces a real-term annual shortfall of £15 billion, over 10% of its anticipated budget, in the five years from 2011.
The crisis could threaten the future of the NHS in providing care free at the point of need unless urgent action is taken now, according to the NHS Confederation report.
Chief executive Steve Barnett said: "If it does not, then the mistakes of the past could be repeated and shortages in funding will translate to the kind of across the board cuts which could see waiting lists lengthen, standards fall and dissatisfaction with the service grow among patients and staff."
Government spending on health has increased since Labour came to power in 1997. In 2007-8, the NHS received its biggest cash increase ever, equivalent to a 7% increase in real terms, or £10bn.
But the new NHS Confederation report, 'Dealing with the downturn: the NHS's greatest ever leadership challenge', said in just under two years the NHS will face the most severe constriction in its finances.
It warns that any modest cash increases could be surpassed by mounting costs within the NHS, which would leave it facing a real-term reduction of £15bn over the five years from 2011.
The NHS budget for 2010-11 is forecast at just under £110bn, making the predicted shortfall between rising costs and the budget significant at more than 10%.
The author of the report, the Confederation's director of policy Nigel Edwards, said that while there was considerable scope to make savings the task was not an easy one.
He added: "There are savings in the system, but there will have to be tough decisions made to find them.
"The principles of the NHS still enjoy huge public support, but if they are going to remain the same a great deal will have to change and in doing this there is the opportunity to make the service better as a result."
New health secretary Andy Burnham has said he will focus on prevention of disease in areas of lifestyle and obesity, in order to make necessary cost savings in the service.
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