This interactive chart shows possible scenarios for closing the funding gap facing NHS services in England up to 2021/22.
The dark grey line shows funding pressures under our baseline assumption, in which recently observed rising trends in hospital activity, chronic conditions and pay continue between 2014/15 and 2021/22. In this scenario, spending on hospital services in England rises to £117 billion in real terms in 2021/22.
The dark blue line shows reduced funding pressures if additional ongoing cash savings are released as a result of the QIPP productivity measures made between 2010/11 and 2014/15. It is likely that the NHS would find it difficult to rapidly turn these productivity gains fully into ‘cashable’ savings, due to substantial fixed and semi-fixed costs.
The green line shows that further reductions in funding pressures are achievable through better management of people with chronic conditions. The age- and sex-specific probability of receiving an inpatient admission for a chronic condition rose between 2004/05 and 2009/10. The additional pressure this places on hospital services is at least as great as that which is attributable to the population ageing and growing in size.
The light blue dashed line shows the funding that would be available if the allocation for the English NHS grew in line with the 2012 Office of Budget Responsibility projection of growth in GDP (2.4 per cent per year beyond 2014/15). If further savings are made as described above, this increase in allocation would be sufficient to meet the rising pressures.
The pink dashed line shows the funding that would be available if the allocation for the English NHS is frozen in real terms between 2015/16 and 2021/22. Even following the further savings described above, a funding gap in 2021/22 worth £16 billion in real terms would remain. This would equate to around £19 billion over the budget for the whole English NHS.
This chart is taken from the report: A decade of austerity? The funding pressures facing the NHS from 2010/11 to 2021/22 (Nuffield Trust, December 2012), which forms part of the Nuffield Trust’s wider research programme: Buying time: what is the scale of the financial challenge facing the NHS and how can it be met?
Access more charts from this series: