Hospital closures a possibility as NHS tries to balance books, warns report

Hospitals face being shut down and patient services rationed as the health service in England struggles to tackle a funding black hole, a respected think tank has warned.

The NHS will "struggle" to meet its target of saving £22 billion by 2020 as demand continues to grow, according to the Nuffield Trust.

Without extra cash or reforms to ease pressure on services, health chiefs will be forced to take "unpalatable" decisions to balance the books, it said.

"If commissioners fail in their attempts to reduce the rate at which demand is growing, or if additional funding cannot be secured, the NHS will face some unpalatable decisions in order to curb the growth in activity and bring the books into balance," the report into NHS finances states.

"These could include extending waiting times for treatment, raising the threshold at which patients become eligible for treatment, cutting some services altogether, or closing whole sites or hospitals."

The trust found that even if hospitals and other NHS providers made savings of 2% a year, the funding gap would still stand at £6 billion by 2020/21.

It warns that reducing the deficit would mean savings of up to 4% over coming years, a level that has "never been achieved to date" over a sustained period.

Demand on services is growing by an estimated 3.1% a year, according to the Feeling The Crunch: NHS Finances To 2020 report.

It found that health providers are in deficit partly because the rate they have been paid for procedures and treatments does not cover their costs.

NHS England is increasing the tariff but the move will push commissioners into deficit for the first time by 2018/19, the think tank said.

Shadow health secretary Diane Abbott said: "The report is damning. It's a very serious warning that we could see a rationing of health services if the financial crisis in the NHS is not addressed.

"The Tory Government's short-termism is impossible to defend. Providers are managing savings of around 2%, they do not believe they can make the 4% target.

"The Government wants to plan the NHS on an imaginary scenario. The reality is that the NHS faces a £22 billion funding shortfall four-and-a-half years from now and it is patients who will pay the price."