NHS Financial Crisis Will Go on for Years, Warn Funding Experts

By DANIEL MARTIN

THE cash crisis in the Health Service is likely to drag on for years, a respected health think-tank has warned.

The NHS faces ‘increasing turbulence and financial uncertainty’ when funding increases are stopped after 2008, according to a report by the King’s Fund.

The squeeze in spending will be another blow to the many trusts already finding it difficult to balance the books. Last year many had to cut services and jobs to offset Pounds 1.3billion of debt.

The report said the Government must take urgent action to improve productivity, reduce wide variations in hospital performance and win staff support for reform if the service is to cope with a decrease in funding.

Such reform is essential if the NHS is to have ‘a long-term viable future’, it added.

King’s Fund chief economist Professor John Appleby said: ‘The next few years will be characterised by increasing turbulence and financial uncertainty as the Government’s reforms continue to bite, but there is no reason why the Health Service cannot adapt to these changes and become more responsive and efficient.’ This summer Gordon Brown will unveil his comprehensive spending review, expected to cap funding increases at between three and 3.5 per cent a year from 2008 to 2011 less than half the annual increase the service has received since 2000.

King’s Fund chief executive Niall Dickson said: ‘Everyone knows the days of massive growth in health spending will come to an end from 2008. That is bound to be difficult but it should not be a cause for despair.

Once the service is placed on a sound financial footing, the focus must be on improving productivity, tackling variations in performance and setting the right incentives.’ That would ‘inevitably’ mean many hospitals would have to change the way they provide services to patients.

‘Much more could, and needs, to be done to improve patients’ experience of care, clinical safety and health outcomes in general. That is why the next few years will be crucial if the health service is to have a long-term viable future.’ The report rejected calls from some on the Right to move towards a Europeanstyle social insurance system instead of the tax-funded scheme in place since 1948.

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