Exclusive: NHS faces financial disaster in 2015 as politicians urged to find radical solution

Two finance directors in three fear their hospital will go into deficit next year as next government must choose between cuts and extra spending, say experts

Health Reporter

The NHS faces a “financial crisis” next year as a budget freeze imposed by the Coalition risks pushing most hospital trusts into deficit, a leading think-tank has warned.

In a grim message to all three major parties,  the King’s Fund said that whoever wins next May’s general election will need to find more funding for the NHS or face up to the reality of “significant cuts to services”.

The future of the health service is at risk unless politicians come up with radical solutions to the crisis in the coming months, it warns. 

In its quarterly monitoring report, the health policy think-tank said it had encountered deep and widespread gloom among finance directors of NHS hospital trusts and clinical commissioning groups in England.

Two-thirds of NHS trust finance directors were concerned that their hospital would go into deficit in 2015-16. Another 20 per cent said they were uncertain about the future, leaving a small minority confident that they could balance the books.

The NHS in England has in effect had no real rise in spending since the Coalition Government came to power in 2010, and 65 trusts are already in deficit.

Although George Osborne has consistently protected the NHS budget from cuts, the realities of the UK’s ageing population, coupled with the rising cost of medicines and new health technologies, have increased financial demands on the service. This means keeping the budget steady amounts to a real-terms cut.

The health service’s budget, which is well in excess of £100bn, will go up by only 0.1 per cent in 2014-15. 

NHS trusts have already been forced to make significant savings, in preparation for a projected budget deficit of £30bn by 2020.

Without extra funding, the NHS is facing significant cuts to services Without extra funding, the NHS is facing significant cuts to services (Universal Images)

However, the political impact of the Mid Staffordshire NHS Trust scandal has led to an expensive reinvestment in staff to meet Department of Health edicts on care standards. In 2015-16, the NHS will have to withstand another financial blow, as £3.8bn is transferred from the health budget to local authorities, to expand their work in caring for the elderly and disabled in the community.

While the report found that the NHS has generally been performing well, it said cracks were beginning to show.

Hospital waiting lists are growing, with 360,000 additional patients waiting for treatment in January 2014 compared with the same time last year.

The King’s Fund’s director of policy Richard Murray, a former economic adviser at the Department of Health, said that the scale of the slow-down in NHS funding under the Coalition was unprecedented, adding that the Government and the Opposition faced “a big political choice” over the impending crisis.

“In the past, each time the NHS has got very close to the wire, governments have found extra money. Tony Blair did it, the Conservatives did it before that,” he told The Independent.

“The natural response would be to do that again. The thing that is different now is the deficit-reduction debate. The health service now is a very large proportion of overall spending because it’s been protected while other areas of public spending have been cut back.

“I don’t think any of the political parties are ready for this… It’s a difficult one with deficit reduction so important and the NHS so important, they are stuck between a rock and a hard place.”

Liz Kendall, Labour’s shadow minister for care and older people, said that the Coalition had exacerbated the NHS’s financial problems by “wasting billions” on  reorganising the health service. She called on the Government to publish the final year-end finance figures in one annual account to allow Parliament and taxpayers to hold ministers to account.

The Government has said that funding decisions for the NHS beyond 2015-16 would be made after the election.

A Department of Health spokesperson said: “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.”

News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Arts and Entertainment
Ben Affleck stars as prime suspect Nick Dunne in the film adaptation of Gone Girl
filmBen Affleck and Rosamund Pike excel in David Fincher's film, says Geoffrey Macnab
News
news
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Life and Style
fashionThe supermodel on her career, motherhood and Cara Delevingne
News
i100
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Arts and Entertainment
Rachel, Chandler and Ross try to get Ross's sofa up the stairs in the famous 'Pivot!' scene
tv
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    iJobs Job Widget
    iJobs General

    C# asp.net Developer - West Sussex - permanent - £40k - £50k

    £40000 - £50000 Per Annum + excellent benefits package: Clearwater People Solu...

    SQL Report Analyst (SSRS, CA, SQL 2012)

    £30000 - £38500 Per Annum + 25 days holiday, pension, subsidised restaurant: C...

    Project Manager (infrastructure, upgrades, rollouts)

    £38000 - £45000 Per Annum + excellent benefits package: Clearwater People Solu...

    Project Manager (App development, SAP, interfacing)

    £50000 - £60000 Per Annum + excellent company benefits: Clearwater People Solu...

    Day In a Page

    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments