Protecting the NHS budget will mean tax rises and/or spending cuts in other departments, according to the King’s Fund and Institute for Fiscal Studies.
The organisations report that only substantial NHS efficiency savings would lessen the impact of pledges made by the Labour and Conservative parties not to cut NHS spending in real terms from 2011 onwards.
King’s Fund chief executive Niall Dickson said: “The scale of what is about to hit the healthcare system is unprecedented. It would be a grave mistake to underestimate the challenge ahead.”
Co-author John Appleby, the think tank`s chief economist, says that the NHS is facing “the most significant financial challenge in its history. It has enjoyed unprecedented increases in funding since the turn of the century, but those days will soon be over”.
In order to prepare for the impending financial freeze and hard funding decisions, he said it was crucial the NHS did all it could to improve productivity over the next two years.
The report says that it will need to make gains of between £23.5bn (£3.9bn per year) and £48.9bn (£8.2bn) from 2011-12 to 2016-17.