Monitor’s chief executive has said that even if the NHS did everything the regulator could think of to make savings it would not be enough to close the funding gap facing the service by 2021-22.

David Bennett has revealed Monitor estimates the health service needs total savings of between £28bn and £44bn between 2010-11 and 2021-22 to protect its finances and maintain care quality.

He said the health sector regulator had looked “across the whole system” at “all the possible ways the system could address this gap”. This work had concluded that over the period there were potential savings of up to £12.1bn from improving providers’ efficiency, up to £4bn from integrating care and shifting it to different settings, and up to £1.9bn from service innovation.

On top of this, Monitor estimated the NHS could make £7.5bn one-off savings from reorganising its estate and selling off excess land and buildings.

In the “best case”, the regulator had identified total savings of just £25.5bn - £2.5bn short of its lower estimate of what was needed.

Mr Bennett told Healthcare Financial Management Association members: “The point here, is when we do all these things – this is pretty well everything we can think of, within reason, that the sector might do – it doesn’t quite close that gap. And we could imagine that that gap might have to be bigger.”

On Monitor’s estimates the gap would be £28bn if health spending – which has been more or less frozen in real terms since 2010-11 – began to rise again after 2014-15. The government has already confirmed it will remain frozen in 2015-16.

Monitor’s upper estimate – of a £44bn funding gap – assumes the health budget remains frozen for the entire period.

Mr Bennett noted the NHS had already achieved reported savings of around £11bn since 2010-11, which would bring the outstanding gap down to a maximum of £33bn. But he added: “I think a significant element of that £11bn [saving] has come about as a result of the wage freeze.

“That’s not going to continue…

“And everything we know about public sector wage freezes is that when you take them away there’s huge upwards pressure. So one thing that does worry me is even that £11bn achieved so far may be difficult to entirely hang onto.”

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