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Hospitals will lose £2bn in funding

Money will go to pooled NHS and local authority budget to fund social care and community services

Ingrid Torjesen

Friday, 11 October 2013

Hospitals will see a £2bn cut in funding as the NHS directs more money towards community services and community care, the NHS Chief Executive Sir David Nicholson has revealed.

The money is expected to begin to be transferred from the next financial year to avoid a “financial cliff edge” from a vast removal of funds, he says in a letter to NHS organisations.

The Government announced in the July comprehensive spending review plans for pooling of large sums with local authorities in order to direct much larger NHS sums to social care and other community services from 2015-16. The pooled budget, to be known as the integration transformation fund, will be worth £3.8bn in 2015-6.

Sir David’s letter reveals what the pooling will mean for NHS services, and says that the NHS will start to feel the impact from April next year.

The letter says: “[The pooled budget] creates a substantial ring-fenced budget for investment in out-of-hospital care. However, it will also require us to make savings of over £2bn in existing spending on acute care.

“This implies an extra productivity gain of 2-3 per cent across the NHS as a whole in 2015-16.”

The letter adds: “We are currently exploring the feasibility of bringing forward an element of the 2015-16 saving requirement into 2014-15 to avoid a financial ‘cliff edge’ in 2015-16.”

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