Kings Fund - How cold will it be? Prospects for NHS funding: 2011-2017 - 20 Jul

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Summary
NHS spending in England may have more than doubled in real terms since 1999/2000, but the prospects for future funding now look bleak. Although there is consensus that the NHS faces a tough financial future, there is no agreement about just how cold the financial climate will be. Starting with a look at historical funding for the NHS, The King’s Fund and the Institute for Fiscal Studies set out three plausible future funding scenarios and their consequences. The paper concludes with an assessment of each scenario and the options for funding up to 2017.

Foreword
Much has already been written about the tighter fi nancial times facing the health service in England and indeed in the rest of the UK. After years of unprecedented plenty, our publicly funded health care system is about to enter a period of uncertainty in
which growth in its budget is certain to be constrained if not eliminated. That much is agreed, although listening to some politicians over the past few months you could be forgiven for believing that the NHS will somehow be immune from the economic downturn. The suggestion has been that while there may not be as much extra money as in recent years, the health service will somehow be protected – and that this crisis will be over relatively quickly. The dangerous implication of this false prospectus is that there is no need for urgent action and that ploughing a similar course to that pursued in recent years will suffi ce.

This paper, a collaboration between researchers at The King’s Fund and the Institute for Fiscal Studies, sets out not only why that analysis is wrong but also why it is dangerous. There is a window of opportunity, probably between one and two years, during which funding remains relatively generous, and grasping that opportunity will be the key to driving continued improvement.

In many ways the NHS in England is more robust and better prepared than ever to deal with the downturn. Current funding levels enable it to employ more professionals than at any time in its history. There have been huge improvements in the capital infrastructure, and waiting times have been slashed. All this means that more need is being met and that the gap between demand and supply has been signifi cantly reduced.

There is good news too on attitudes – there are tentative signs that clinicians are more engaged in shaping and running services after a period in which change was driven by central control and targets, which, for all their achievements, seemed to be offering diminishing returns.

It would be a mistake though to underestimate the challenge or the opportunity the downturn provides. There are key areas where productivity can be increased signifi cantly and at the same time the quality of service improved. This will not be about devising new and untried solutions – the good practice and techniques are already out there in the health service – the imperative is to create the conditions in which they can be applied in each part of the country.

For The King’s Fund this paper represents the fi rst output of a programme to understand how we can deliver better quality at lower cost; we will identify the levers, actions and incentives and then work with managers and professionals to help deliver the changes and evaluate their impact.

Niall Dickson
Chief Executive, The King’s Fund

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