Kings Fund warns of financial crisis in NHS

More money must be ploughed into the NHS or there could be “significant cuts to services”, a health charity has warned.

The King’s Fund said the next government will need to find more funds for the health service or accept the cuts.

The warning comes after its latest report on NHS finances, which paints a bleak picture for the future.

A poll of 74 NHS trust finance directors and 47 clinical commissioning group (CCG) finance leads found that only two in five hospital financial bosses are confident their organisation will achieve financial balance in 2014/15. And only 16% believe this will be achieved in 2015/16.

Meanwhile only a third of finance leads for CCGs are sure they will balance the books in 2015/16, according to the health care charity’s latest report.

The report suggests that there is a “looming” financial crisis in the NHS. It claims that the lack of confidence about future finances is partly to do with concerns about the Better Care Fund – which will draw £1.9 billion of funds from the NHS to support joined up working between health and social care services from April 2015.

Richard Murray, director of policy at The King’s Fund, said: “The NHS has coped well during the winter and avoided the A&E crisis that was so widely predicted.

“However, as the implications for hospitals of implementing the Better Care Fund sink in, there is a growing recognition that the NHS will face a financial crisis in 2015/16, if not before.

“It is now certain that the next government will need to find more funding for the NHS or accept significant cuts to services.”

The Royal College of Nursing (RCN) said that patients must not be made to pay for the NHS financial crisis. Dr Peter Carter, chief executive and general secretary of the RCN, said: “The NHS is currently managing to deliver for patients only by overstretching its staff and pushing the limits of its budget.

“This is not sustainable and the NHS must listen to the concerns of its clinical staff as well as its finance directors.

“Patients must not pay for the NHS’s financial crisis. Funds should be spent intelligently, by delivering care close to home and keeping patients with long-term conditions well and out of hospital. In the long term, this is the only way for the NHS to adapt to the needs of an ageing population.

“The NHS may have dodged a bullet with a mild winter, but it still needs to work together as one service to be able to respond to whatever is thrown at it over the coming years. It will not be well placed to do this if it is permanently on the edge of a financial cliff.”

Labour said that health service finances have “deteriorated on the Government’s watch” but the Department of Health said it is taking action to address deficits.

Labour’s shadow minister for care and older people Liz Kendall said: “Today’s warning from The King’s Fund of a looming ‘financial crunch’ confirms Labour’s warnings that the NHS’s finances have deteriorated badly on this Government’s watch.

“NHS Trust deficits are growing and there are now twice as many Foundation Trusts in the red compared to this time last year.

“When the NHS faces the biggest financial challenge of its life, David Cameron should have been laser-focused on reforming frontline services to deliver better care and better value for money. Instead he forced through a massive backroom reorganisation that’s been a damaging distraction, wasted billions of pounds and weakened the grip on NHS finances too.”

A Department of Health spokeswoman said: “As this report acknowledges, the NHS is performing well and meeting demand, despite increasing pressures on services.

“We recognise the scale of the financial challenge that trusts are facing and are taking action to address deficits, including putting recovery plans in place.

“We are clear that NHS trusts must meet their statutory duty to balance the books, and we remain confident that the NHS will have a balanced budget at the end of this financial year.”