NHS :: NHS faces crucial period ahead of reduced investment from 2008

The UK government must take action now to reduce widespread variations in hospital performance, improve productivity and win the support of health staff in its efforts to reform the health service if the NHS is to cope with lower growth in funding from 2008 onwards.

A report published by the King?s Fund warns that these challenges will be among the most significant facing the health service over the next few years following this summer?s comprehensive spending review (CSR), which is set to bring an end to the unprecedented increases in NHS funding since 2002.

The Chancellor is now expected to announce real terms cash increases in the next CSR of between 3.0 to 3.5 per cent per year for the NHS up to 2011/12 ? less than half the annual increase received by the service every year since 2000. But the report argues that the slowdown in funding, despite coming at a time when the NHS is already facing significant financial problems, should not damage patient care and the delivery of better services as long as the NHS plans effectively for a period of reduced investment.

King?s Fund Chief Executive Niall Dickson said: ?Everyone knows the days of massive growth in health spending will come to an end from 2008. That is bound to be difficult but it should not be a cause for despair. The message from this report is clear ? once the service is placed on a sound financial footing, the focus must be on improving productivity, tackling variations in performance and setting the right incentives for both staff and institutions. This will inevitably mean local organisations will need to develop a much greater understanding of the different needs of individual patients and for some organisations that will demand a very different approach to delivery.

?The unprecedented levels of funding the NHS has received in recent years have delivered real benefits in terms of lower waiting lists, more staff and better care in cancer, coronary heart disease and mental health. But much more could and needs to be done to improve patients? experience of care, clinical safety and health outcomes in general. That is why the next few years will be crucial if the health service is to have a viable, long-term future.

?As long as the government is prepared to continue to provide extra investment, and health organisations respond and plan effectively, there is no reason why the NHS cannot deliver more and better services in the years ahead.?

The report Funding Health Care: 2008 and beyond is the edited outcome of a high-level summit at Leeds Castle, attended by government officials, NHS managers, health professionals, economists and other leading policy analysts, and features chapters from a number of leading health commentators.

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