The King's Fund response to 2007 Comprehensive Spending Review

The King's Fund today welcomed the government's continued commitment to investing in the NHS, but warned that significant improvements in productivity and progress in tackling unhealthy lifestyles will be needed if the health service is to make the most of its spending increases over the next three years.

Commenting in response to the Comprehensive Spending Review (CSR), which announced annual real terms increases of 4 per cent for the NHS for the next three years, King's Fund chief executive Niall Dickson said:

'This spending review marks the end of a period of huge growth in health spending. Reducing the annual real growth from what it has been over the past seven years will feel like a cut. However, in a fiscally tight spending review, the NHS has done well compared with other departments. This settlement will also mean that the NHS will continue to take an increasing share of GDP – bringing public and private UK spend up to around 9.4 per cent of GDP, close to the average for our EU neighbours.

'But a slow-down in the growth of funding should not damage patient care and the delivery of better services as the NHS has been planning for this slow-down. In many ways, the NHS is in good shape to deal with lower growth in funding – it has more money, more staff, reduced waiting times, increasing patient satisfaction rates and no overall deficits.

'However, today's settlement does leave the service short of the real terms increases of 4.4 per cent over the next five years that Sir Derek Wanless recommended in his 2002 review for the then Chancellor, Gordon Brown. While the NHS is in better financial shape than in recent years, there remains a considerable challenge facing the service from poor productivity and slower than expected progress in tackling unhealthy lifestyles.

'As Sir Derek recently recommended in his report for the King's Fund, the service must focus on improving productivity, tackling variations in performance and setting the right incentives for both staff and institutions. There remains evidence of persistent and largely unexplained variations in performance across the NHS that indicate there are productivity gains to be made in areas such as operation rates, treatment thresholds and prescribing rates. And system reforms, such as Payment by Results and patient choice, could encourage the service to seek out more productive ways of meeting patients’ health care needs.

'Although the growth in NHS funding may be slowing, demand and public expectations will continue to increase. Getting more benefit from every pound spent on health care will, as ever, be an urgent priority. The danger is that if productivity doesn't improve and progress isn't made on tackling rising levels of obesity in particular, then pressures to spend even more than the amount recommended by the 2002 Wanless review will grow.

'Inevitably, this will lead to questions being raised about the long-term viability of the health service.'

The King's Fund will shortly issue a separate response to the social care announcement made in today's Comprehensive Spending Review.

Notes to editors: 

  1. For further information or interviews, please contact the King’s Fund press office on 020 7307 2585, 020 7307 2632 or 020 7307 2581. An ISDN line is available for interviews on 020 7637 0185
  2. Sir Derek Wanless’ report for the King’s Fund Our Future Health Secured? A review of NHS funding and performance is available on the website.
  3. The King’s Fund is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through funding. We are a major resource to people working in health and social care, offering leadership development programmes; seminars and workshops; publications; information and library services; and conference and meeting facilities.