Ministers are set to extend the unprecedented efficiency drive currently underway in the NHS beyond the four years of the so-called ‘Nicholson Challenge', leaving GPs facing continuing downward pressure on budgets for the rest of the decade.
The Department of Health's director-general of policy, strategy and finance Richard Douglas is understood to have told a DH meeting earlier this month that efficiency savings would need to be ongoing.
He showed a series of projections suggesting that annual efficiency savings would continue to be needed beyond 2015 because of increasing demand from an ageing population and ever more expensive medicines.
The "Nicholson Challenge" – in which NHS chief executive Sir David Nicholson demanded some £20 billion in savings by 2015, with year-on-year savings of 4% - was first set out in Chancellor George Osborne four-year spending review in 2010.
A spokesman for health secretary Andrew Lansley told Pulse: ‘Officials have suggested a whole range of scenarios for future health spending, including ones where there would not have to be efficiency savings in order to meet changes in demand and costs.'
‘We have shown our support for the NHS with our decision to increase spending on it each year in real terms. Labour have actually cut spending in Wales for the NHS and planned do the same in England if they had won the election.'
‘But we have always been clear that because of the rising cost pressures from an ageing population and new medicines the NHS needs to modernise to make it stronger in the future. Our reforms slash bureaucracy and give more power to patients and doctors - Labour's plans to do absolutely nothing would leave the NHS in financial chaos.'