NHS lurches towards new £2bn funding gap crisis

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Changes to NHS Bill

Although the NHS budget for England is set at £100bn, a £2bn funding gap has emerged, according to the BBC. Several health chiefs have told the corporation that the maths don't quite tally. The upshot? There's real worry that some hospitals could just run out of cash.

"There is a real risk of that this year and particularly next year," one chief exec told the Beeb.

Breaking point

The NHS budget is under huge strain. Its budget has been allowed to rise in line with inflation, unlike many other Government departments, but there has been little additional cash pumped into it.

"There needs to be a longer-term resolution of the funding issues facing the NHS because," Chris Ham, chief exec of the King's Fund says, "after four years of no growth in the budget, it's hard to see where the savings will come from."

Ham told the BBC: "The impact is already being felt on patient care. We need an honest discussion [about] how much more money [is needed and] where will it come from to ensure the sustainability of the NHS that we all value so highly."

15,000 more beds

The choices are stark. Staff pension costs are enormous, while the price of drug treatments - something the NHS does not have great control over - continue to rise. Then there's the sheer demographics: most people are living longer, requiring more treatment and support.

Existing inequalities like the postcode lottery have yet to be lanced. The Nuffield Trust claims around 15,000 more beds are needed in the next seven years if England is just keep up with current demographic needs. Many hospitals are substantially already in deficit.

Although there has been more emphasis on community care, many hospitals have fixed costs, so there's limited potential for quick savings (though the Government is pinning hope on more integration with social care).

£10 a visit

A new report from Reform, a right-wing think-tank, suggests £1.2bn could be raised by charging for GP appointments (its ex deputy director is a key Coalition adviser on health). Around £10 per visit has been suggested.

Yet the only country in the EU that spends less per head on health than the UK is Italy (ONS figures). "From 2010 to 2012 have (sic) seen expenditure on healthcare growth decline to far lower levels," said the ONS in this report.

Talk to the wider British public and two thirds of them favour more taxation to fund the NHS, according to an Ipsos MORI poll. Meanwhile, Sir David Nicholson, ex head of NHS England, deplores more Coalition 'meddling'.

"We are bogged down in a morass of competition law. We have competition lawyers all over the place telling us what to do, causing enormous difficulty."

The Department of Health claims it can make the savings to close any shortfall. But on a big enough scale to resist cutting more services? The news comes hard on the heels of a new £2.5bn funding gap for NHS Wales.