Responding to today's Budget announcement, Professor John Appleby, chief economist at The King's Fund, said:
'This Budget confirms what we already knew – that despite a small rise next year, NHS spending will be frozen in real terms for the foreseeable future.
'Our analysis has shown that the NHS will face a £21bn productivity gap by 2013/14. Although this could be reduced to £14bn by looking again at assumptions about future spending in some key areas, closing this gap would still require productivity gains of around 3–4 per cent a year. Today's ONS figures showing that NHS productivity fell by 3.3 per cent between 1995-2008, show just how tough a challenge this will be.
'Improving productivity has to be the top priority if the NHS is to maintain quality and avoid having to cut services. Politicians will need to be honest about the scale of the challenge ahead and help the public to understand that some of their services may need to change in order to improve efficiency and maintain quality.
'The Chancellor's plans to use the proceeds from savings made by freezing Inheritance Tax thresholds may go some way to plugging the growing gap in social care funding but this is no substitute for long-term reform, which the now imminent White Paper must address.'
Notes to editors:
- Professor John Appleby, chief economist at The King’s Fund, will be giving oral evidence at the Health Select Committee’s one-off session on value for money in the NHS on 25 March. Following on from today’s Budget and the debate about how the NHS can weather the difficult financial climate it faces, the session is expected to take a wide-ranging look at NHS spending, productivity and value for money. The session, likely to be the Committee’s last in this parliament, will take place at 10.00am in the Wilson Room, Portcullis House, where Professor Appleby will give evidence alongside Andrew Haldenby, Director of Reform and Professor Bernard Crump, CEO of NHS Institute for Innovation and Improvement.
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