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Cuts Mean NHS Must Do Less, Experts Warn

Wed, 04 July 2012 5:03AM

In the wake of its biggest-ever reorganisation, the range of services available free on the NHS should be reconsidered, a financial thinktank has claimed.

Because of the current administration's commitment to austerity, public funding for health is set to be tight for at least 10 years, the Institute for Fiscal Studies said.

And critics of the far-reaching top-down reorganisation of the NHS by Andrew Lansley, the health secretary, warn that the shake-up has cost the service a huge amount at a time when money is tighter than ever.

In a report mapping the longer-term financial challenge facing the health service, researchers claim NHS spending to 2015 will be the tightest four-year period in the last 50 years.

The research, funded by the Nuffield Trust, concludes that "serious thought" must be given to NHS spending including reconsidering which services should be freely available or the level of taxation needed to finance the service in the future.

The authors of the study said that continuing the real freeze in English NHS spending between 2015 and 2017 would mean cutting spending on other public services by an average 2.3% a year.

NHS spending in the UK reached £137.4bn in 2010/11, the authors said, with the spending in England accounting for a quarter of all public spending.

The report states that increasing health spending in line with national income between 2015 and 2022 would still leave the NHS budget growing less quickly than what is needed to care for an ageing population.

The seven-year increase, along with increases to other public service spending by 1% a year in real terms, would require an increase of taxation, borrowing or further welfare cuts - over and above the £10bn hinted at by George Osborne in his Budget speech - amounting to roughly £9bn.

The authors said this is equivalent to an increase in the main rate of VAT from 20% to just over 22%.

IFS deputy director Carl Emmerson, who co-wrote the report, said: "The current spending plans that run to March 2015 are tighter for the NHS than any delivered in the last 50 years, and the outlook for spending on public services beyond this suggests that, if it grows at all, NHS spending is not likely to keep pace with the amount that it has been estimated it needs to keep pace with the costs of an ageing population."

Nuffield Trust chief economist Anita Charlesworth added: "Asking the NHS to take a more equal share of the pain across the public services amounts to an unprecedented productivity challenge.

"Whatever happens, the NHS needs to plan a medium-term future based on belt-tightening and it needs to be prepared for future years to be even tougher than they are now."

Jacqueline Davis, from the campaign group Keep Our NHS Public, said: "The Government continues to squander the NHS budget on a marketisation agenda which costs an estimated £10bn a year, money lost to frontline clinical services.

"Another £3bn has been spent on unnecessary reforms.

"The Government should stop wasting money on creating an unwanted market in the English NHS, otherwise there will be a continued reduction in core services and the NHS risks becoming a poor service for poor people."

NHS Confederation chief executive Mike Farrar said: "We need to be honest about the action necessary to deal with a decade of spending squeezes and the rising cost of healthcare.

"We need to forensically examine what services and treatments provide the best outcomes for patients and local communities, and what the NHS can and cannot afford to provide in the future.

"This will be far from pain-free, but decisive action is necessary if we are to maintain high-quality services and stay in the black.

"If the NHS does not change, it will not be fit for the future. We need swift action before the financial pressures overcome us."


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