Analysis carried out for the briefing shows that NHS providers and commissioners recorded an aggregate deficit of £1.85 billion in 2015/16, a threefold increase on the previous year and the biggest deficit in NHS history. This is despite stringent financial controls and short-term measures implemented by the government and NHS bodies to reduce costs.
The briefing argues that the extent of overspending makes it clear that the deficit is not down to mismanagement in individual organisations but is a systemic problem, with the NHS no longer able to meet rising demand for services and maintain standards of care with the budget is has been allocated. It warns that cuts in staffing and reductions in the quality of patient care are inevitable if restoring financial balance is the government’s top priority.
Looking to the future, the briefing says that programmes to implement new models of care offer significant opportunities to improve services for patients but will not deliver major savings in the short term. It also argues that the NHS can improve productivity by improving clinical practice and reducing waste, although this cannot be achieved at the pace or scale needed to meet the target of delivering £22 billion in efficiency savings by 2020/21.
The briefing, which comes ahead of the publication of the Department of Health’s annual accounts and a new drive from national bodies to reduce deficits across the NHS, also highlights the risks to the NHS following the UK’s vote to leave the EU. It warns that the political and economic instability following the Brexit vote are likely to add to the financial pressures the NHS faces.
Helen McKenna, Senior Policy Adviser at The King’s Fund and one of the authors of the report, said: "Politicians need to be honest with the public about what the NHS can offer with the funding allocated to it. It is no longer credible to argue that the NHS can continue to meet increasing demand for services, deliver current standards of care and stay within its budget. This is widely understood within the NHS and now needs to be debated with the public. There are no easy choices, but it would be disastrous to adopt a mindset that fails to acknowledge the serious state of the NHS in England today. We are drawing attention to these issues now while there is still time to have an informed and honest debate about the best way of sustaining and transforming care."