EXCLUSIVE: NHS ‘faces £60bn funding gap by 2025’

The health service faces an “eye-watering” funding gap of £60bn by 2025, NHS England has disclosed to HSJ.

The figure is based on an NHS England forecast that underpins a major report published on Thursday. The £30bn funding deficit by 2020, projected in this document, was revealed by HSJ last Friday.

NHS England director of strategy Robert Harris told HSJ this week that the predicted deficit doubled when the timeframe is extended to 2025.

The revelation comes as Monitor chief executive David Bennett issued a bleak assessment of the service’s viability, concluding that even if the NHS made all the savings the regulator could conceive of, it would still have a minimum funding gap of £2.5bn in eight years’ time.

Professor Harris said: “Between 2013-14 and 2020-21 the gap between resources available and what we need to spend is about £30bn. If we go a bit further ahead to 2024-25, that gap will be around £60bn.

“They are pretty eye-watering numbers.”

The projected deficit assumes health service funding remains flat in real terms until 2025 and takes into account rising demand for services resulting from demographic pressures.

The report, The NHS belongs to the people: a call to action, was expected to say the health service will become unsustainable without a fundamental rethink of service provision. It calls for a national debate to help shape a new 10-year strategy.

Professor Harris said “everything was on the table” under the terms of the review − except cutting “fundamental” services or charging for them. The status quo was not an option.

“We don’t believe we will cut or charge for fundamental services,” he said. “We firmly believe reducing the scope of services that the NHS offers is unconstitutional and more charges, or co-payments, are inconsistent with NHS principles.”

He added: “We are not consulting on anything right now. We do not have any predetermined solutions or options. We need to be bold and creative in our thinking but there are some things that we are not considering.”

The development of the strategy will take place in three phases. First, NHS England will consult patients and interested parties over the summer.

Feedback will be used by NHS England to draw up potential options that will be subject to further consultation before a final report is published by March 2014.  

Plans for the review were first revealed by Sir David Nicholson in an HSJ interview last month.

The NHS England chief executive said it was time to question whether “the straightforward commissioner-provider split” was the best way to organise care for some communities.  

A spokeswoman for NHS England said it was “not ruling out” proposing legislative changes to the Department of Health.

Commons health committee chair Stephen Dorrell told HSJ he thought the forecast sounded “roughly” right but said “the last thing the health service needed” was another “disorganisation” resulting from fresh legislation.

Mr Dorrell said the service faced the “challenge” of using its “budget more efficiently year on year” and did not necessarily “need to cut anything” to fill the gap. He stressed it was crucial that service improvements were delivered at the same time as cost savings.

John Appleby, chief economist at the King’s Fund, said assuming no real term funding increases until after 2025 was a “bold assumption” and that the calculations were “overly pessimistic”.

The economy was tough at present but this was unlikely to last until 2025 and there would be “public demand to return to increases in real spending quite soon”, he said.

Professor Appleby added some parties would use the figure to refresh calls for charging for services but this would be “less efficient” than funding through taxation.

An NHS England spokeswoman said the £60bn was a “straight line forecast” of the £30bn figure could “roughly double” in the space of five years.

“This is why we need to think now about how we shall transform the NHS, think about new models of care, and think about where and how we access health and care services,” she said.