Key points
- Patient demands and the desire to maintain and improve the quality of NHS services will outstrip NHS funding growth in coming years. If this gap is to be filled it will require improvements in productivity – making every health care pound work harder.
- The Office for National Statistics (ONS) estimates that the productivity of the NHS across the UK as a whole fell by 3.3 per cent between 1995 and 2008, an annual average decline of 0.3 per cent (Public Service output, Inputs and Productivity)
- The coalition government has pledged to maintain real-terms increases in NHS funding, details of which will be set out in the Autumn Spending Review on 20 October 2010. These increases will be significantly lower than the increases in funding the NHS has become accustomed to in recent years – between 2000/01 and 2010/11 real-terms NHS expenditure increased by nearly 7 per cent each year, compared to average increases of 4 per cent over the lifetime of the NHS.
- Staffing accounts for around half the total budget and about 70 per cent of hospital costs (see A high-performing NHS?).
- The funding gap has been estimated to be between £15-£20 billion by 2014, as discussed in Equity and excellence: Liberating the NHS, and around £21 billion by 2013/14 according to How cold will it be? Prospects for NHS funding: 2011-17. We estimated in our recent publication that this shortfall could be reduced to a total of £14 billion by 2014 if decisions are taken in three key areas – pay and price constraint, not pursuing further reductions in waiting times, and reducing growth in capital investment.
- The King's Fund has outlined several ways in which resources can be used more effectively, for example, identifying unacceptable variations in clinical practice, improving staff productivity and changing models of care for people with long-term conditions.
