NHS chief executive David Nicholson has warned that the health service faces annual savings equivalent to cuts of more than £6bn from 2011 onwards.

Mr Nicholson has insisted the primary care trust allocations for 2010-11 are safe but he used his report last week on the year 2008-09 to warn: “We should also plan on the assumption that we will need to release unprecedented levels of efficiency savings between 2011 and 2014 - between £15bn and £20bn across the service over the three years.”

A Department of Health spokeswoman said the £15bn- £20bn figure was an estimate of the impact year-on-year efficiency savings of around 3 per cent would have on the NHS.

Government departments are in the habit of counting efficiency savings made in one year on a cumulative basis. That means that the £15bn-£20bn figure could be constructed by adding together three years’ worth of the £2.3bn cut from the health service’s original spending plans for 2010-11, plus another three years’ worth of similar sized efficiency savings.

Even if the £20bn figure is pessimistic, NHS leaders are issuing increasingly stark messages about future funding.

Mr Nicholson’s warning came as the foundation trust regulator Monitor said it expected foundation plans for 2011-12 “will have been prepared using assumptions which may in time prove to be optimistic”.

In its monthly circular the regulator has asked foundations to prepare fresh plans for 2011-12 and 2012-13 taking a “downside view as to funding availability and clarity as to commissioning arrangements”, which should “assume that short term action may be required to protect available funding”.

It asks that trusts test their assumptions about staffing levels and the mix between fixed and variable staffing costs.

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