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Unrealistic NHS savings targets to result in rationing, report warns

NHS England ‘will struggle’ to save £22bn by 2020 and is likely to be left with at least a £6n funding gap, a new financial report has concluded.

The Nuffield Trust pointed out that to date hospitals and other NHS providers have achieved ‘savings closer to 2% over the last three years’ rather than the 4% target set out, ‘resulting in an underlying provider deficit in 2015/16 of £3.7bn’.

The think tank points out that for the longer term NHS England is relying on its plans for ‘new models of care’ to curb the growth in activity and cut costs, but said it is ‘highly unlikely’ to materialise as existing funding will need to be directed towards the deficit. 

The report said: ‘The NHS in England will struggle to meet the requirement, set by the Five Year Forward View, to save £22 billion by 2020.

‘Our analysis examines the funding gap in detail and concludes that even if hospitals and other NHS providers made cost savings of 2% a year, year after year, the funding gap would still stand at around £6bn by 2020/21.’

The report concludes that: ‘[I]f commissioners fail in their attempts to reduce the rate at which demand is growing, or if additional funding cannot be secured, the NHS will face some unpalatable decisions in order to curb the growth in activity and bring the books into balance’.

It said this could amount to ‘rationing’ such as ‘extending waiting times for treatment, raising the threshold at which patients become eligible for treatment, cutting some services altogether, or closing whole sites or hospitals’.

Nuffield Trust further warned that this comes at the very time when the public is expecting new investment in the NHS, having voted for Brexit on a pledge that EU contributions worth £350m a week would now be spent on NHS instead.

The report said: ‘These rationing dilemmas come immediately after the EU referendum, which may have heightened public expectations that there will be new investment for the NHS.’