The Health Select Committee is looking into the need for savings in health and social care, and the effect on service providers and patient care. Read our response to their inquiry.
Since 2009/10, the drive to reduce the UK’s deficit has meant that the NHS has seen flat budgets after many decades in which spending grew rapidly.
Demand and pressures on cost continue to rise, meaning that the health service must find savings of four per cent each year if it is to continue providing care free at the point of use. Estimates by the Nuffield Trust, now widely accepted, show that this exceptional period is likely to last up to 2021/22.
This submission to the Health Select Committee’s inquiry into public expenditure on health and social care looks at the impact of the NHS’ success in meeting its headline financial targets so far, which has seen it achieve the goals set out in the 2010 Quality, Innovation, Productivity and Performance initiative (QIPP).
Financial performance is diverging as weaker providers become ever weaker
It also examines where future savings might come from, and where we must monitor the risks to capacity and equity which have the potential to emerge from financial pressure.
However, we examine the most recent data on the finances of hospital providers and suggest that there is cause for concern about the sustainability of many hospital trusts. We argue that policy-makers need to consider how the health service could deal with a larger number of acute trusts entering serious financial difficulties than has generally been expected in the past.
The submission examines productivity data from a range of studies, including our own which draws on the most recent data. We conclude that based on historical data and the lack of evidence for an acceleration since the start of QIPP, it is relatively unlikely that the NHS can account for savings of four per cent a year through increased productivity.
Nuffield Trust (2013) Health Committee Inquiry Submission: public expenditure on health and social care. Briefing.