A former senior policy adviser at the Department of Health has warned the NHS could face a financial shortfall of billions of pounds in as little as four years.

Matthew Swindells, managing director of consultancy Tribal, advised Patricia Hewitt when she was health secretary from 2005-07.

He said rising demand coupled with likely real terms funding cuts could mean the health service faces a spending shortfall of up to £25bn by 2013-14.

But in a paper published at the NHS Confederation conference this week he argues primary care trusts can stem at least half of that by making full use of reforms such as care planning, better management of patients with long term chronic conditions and early intervention.

Mr Swindells said these mechanisms were all in the 2006 white paper Our Health, Our Care, Our Say alongside reforms he still advocates, such as polyclinics and increased diversity among providers.

He said: “We’ve known about these for a long time but we are running up towards a brick wall where we have to do it.

“When we said this in the white paper we said it was just a good thing to do. We didn’t make the argument that it was good for productivity and value for money. But now just doing something because it’s a good thing to do is not enough. We need to make the argument it is also more efficient and better value for money.”

He said better care planning, which would see elderly patients who are “incarcerated” in acute hospital beds moved into care in their own homes, could save up to 2 per cent of the commissioning budget a year.

While that would require primary care trusts working more closely with local authorities, Mr Swindells dismissed the idea of mergers between councils and the local health service as the solution.

“Anywhere that decides on a big organisational review before making these changes is going to be sat in a committee while they sink,” he warned.

He said competition between providers was an “important tool” because they could provide ever more niche services to patients, but added it was misleading to view private providers as “grit in the oyster” to drive reform. “PCTs ought to be the grit in the oyster. They hold the funds on behalf of the taxpayers,” he said.