Economists are warning this week's£38bn rescue plan for UK banks creates a "structural hole" in public finances that will make NHS funding cuts and claw-backs inevitable.

The government has insisted the bank bail-out will not affect public finances. A senior Treasury source said there were no plans to revisit the commitments made in the comprehensive spending review in October 2007. But he also said that any effect on public finances would depend on the performance of the government's shares in the banks.

Economists fear the widening gap between tax receipts and public spending is bound to hit the NHS.

King's Fund chief economist John Appleby said: "It's hard not to see the Treasury eyeing up NHS surpluses. They will be looking at everything around the edges to claw back."

Guaranteed returns

The Treasury plans to pay for its bank shares by issuing gilts, which give investors guaranteed returns over a fixed period. It hopes that by the time it needs to pay out the gilts' full value, its shares will have earned a substantial profit.

But with a recession looking likely, the Treasury has not ruled out needing to issue further gilts later this year. The pre-Budget report, not expected until mid-November at the earliest, will set out revised public finance forecasts.

Institute for Fiscal Studies senior research economist Gemma Tetlow told HSJ: "The bank rescue... needs to be financed. It looks like there may be a structural hole in the public finances. Tax receipts are lower than expected and spending is higher." That gap is at least£18.5bn in 2008-09, even without the bank rescue, she said.

The NHS was due to get 3.7 per cent annual real growth between 2008-09 and 2010-11 - down from an average 6.4 per cent since 1999. But Ms Tetlow said 3.7 per cent now looked generous, especially as the NHS had done comparatively well in the 2007 spending settlement. She now expects the 3.7 per cent growth rate to continue up to 2013.

Failure regime

Figures buried in the DH of Health's recent impact assessment on its proposed failure regime for acute trusts show that even before this week, the department was assuming NHS spending growth would be just 1-1.5 per cent higher than GDP. In July to September this year, GDP growth stalled.

Professor Appleby said the service needed to "plan for no growth" after 2011. If the UK enters a recession, the demand for health services will go up as unemployment exacerbates ill health and inequalities.

Economists warn that NHS surpluses, totalling£1.7bn in trusts and primary care trusts plus up to£2.5bn in foundation trusts, could be vulnerable even before 2010-11.

Professor Appleby said the government already "had form" on clawing back unspent capital allocations - the NHS capital budget was slashed by a third in 2007-08.

NHS finance sources have told HSJ that the DH is already pulling back on existing capital allocations.

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