Adam Roberts: NHS funding pressures in a decade of austerity

© Nuffield Trust 3 December 2012

NHS funding pressures in a decade of austerity

Authors: Adam Roberts, Research Analyst www.nuffieldtrust.org.uk/nhs-financial-challenge

© Nuffield Trust

Contents

• Introduction to health care spending, past and present • Funding gap for a decade • Period 1 – 2010/11 to 2014/15 • Period 2 – 2015/16 to 2021/22

NHS PCT Expenditure 2010/11

Projected funding gap in 2021/22 – Base Case

Projected funding gap in 2014/15 – Base Case

Closing the gap in 2014/15

Closing the gap in 2014/15

Closing the gap in 2014/15

Funding gap in 2021/22 under three scenarios from the IFS

Funding gap in 2021/22 under three scenarios from the IFS

Funding gap in 2021/22 under three scenarios from the IFS

Funding gap in 2021/22 under three scenarios from the IFS

Funding gap in 2021/22 under three scenarios from the IFS

Savings compared to freeze in funding

Summary

• Funding gap in 2021/22 of between £44 and £54bn

• Funding gap in 2014/15 would be between £13 and £16bn

• This gap could be closed through a combination of • Pay reform

• Management of chronic conditions

• Reduction of hospital activity through QIPP

• This would reduce the gap in 2021/22 to £12-£14bn in 2021/22, if funding rises in line with GDP forecasts after 2014/15

• Second gap could be closed by • Realising all savings from QIPP

• Continued management of chronic conditions

• If NHS funding frozen in real terms after 2014/15 then remaining funding gap between £16-£19bn

• Growing pressures on social care could create a funding gap of £7-£12bn

© Nuffield Trust

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