Simon Stevens: NHS could run out of cash without a boost

The NHS could run out of money in the next two years if extra cash is not pumped in urgently, the head of the health service has warned.

Simon Stevens raised fears that the government’s forthcoming spending review may not deliver a “workable” funding settlement for the NHS, as he called for budgets for social care to be protected from cuts.

The Government has promised to increase health service funding by £8bn a year by 2020.

Mr Stevens has previously called for “front-loading” of the money, with a greater share of extra funding being made available early, to manage current pressures while changing services to cope with resigning demand.

The NHS has racked up a deficit of almost £1bn in the first three months of this financial year, the worst in a generation, and more than the £820m reached the previous year.

In an interview with Health Service Journal, Mr Stevens raised concerns that current Treasury negotiations would leave the NHS too short of money for the next two financial years.

He said: “As of today, considerably more progress is going to be needed before we can say we have a genuinely workable NHS funding solution for 2016-17 and 2017-18.”

A year ago, Mr Stevens drew up a five year plan for the NHS to help it cope with growing demand, while increasing levels of efficiency.

The Government said it would increase funding, rising to an extra £8bn a year by 2020.

Mr Stevens today reiterated warnings that achieving the plan required “front-loaded investment,” – a greater share of funding early –and no further cuts to social care budgets – which pay for care for the elderly and disabled or funding for public health.

In the interview he said he was not confident the spending review would fulfill this.

The NHS chief executive said he hoped for improved terms before the spending review is published later this month.

“Spending reviews usually come down to the wire, so hopefully we’ll get there by 25 November,” he said

Mr Stevens highlighted a recent international report which showed the UK’s health funding is below that of many other western countries.

“The Organisation for Economic Co-operation and Development has just reminded everyone that we’re already incredibly lean in our country’s health funding, overall, and on a per person basis.

“So the government’s funding commitment to 2020 was both highly welcome and absolutely necessary.

“But for the NHS, next year and the year after are where the rubber will really hit the road. The Forward View maths was explicit that the health service needed frontloaded investment in 2016-17 and 2017-18 - to manage current pressures, kick-start service redesign, and unleash major savings later in the parliament.

“We were also crystal clear that any further cuts in public health and social care would impose extra costs on the NHS over and above the minimum funding requirement.”

The NHS England chief executive suggested that NHS hospital deficits - projected to reach a net total of around £2bn at the end of 2015-16 would only fall substantially if there was a “realistic funding settlement” and cuts in spending on agency staff.

Even then he said he did not expect deficits to be “eliminated altogether” – suggesting this could take several years.

Heidi Alexander, shadow health secretary, said: “Simon Stevens is absolutely right to issue this warning about the pressing need for the Government to address the deepening funding crisis in the NHS.

“It is now clear that unless there is an urgent and significant injection of money into the NHS, then standards of care will go backwards and the promise of a seven-day NHS will never be realised.

Accusing ministers of "burying their heads in the sand, she said: “The uncomfortable truth for this Tory Government is that the pressures facing the NHS are of their own making. Cuts to older people’s care have piled the pressure on hospitals, and cuts to nurse training places have forced hospitals to drain resources hiring expensive agency staff."

Clare Marx, President of the Royal College of Surgeons said: “Despite the financial pressures facing the NHS, more people than ever before are now treated and NHS staff have performed incredibly well in spite of the pressures. However cracks are appearing and in surgery, waiting times are starting to lengthen. There is also growing evidence of the rationing of care. "

She called for "major investment" in health and social care care at the earliest opportunity and changes in the way trusts are paid, to reduce rationing of common operations such as hip surgery.