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Former NHS boss warns health service faces ‘financial hole’

Doubt cast on Tory’s £8b funding promise for health

Jo Carlowe

Thursday, 16 April 2015

The NHS faces a ‘financial hole’ which politicians are choosing to ignore during the election campaign, the former head of NHS England has warned today. 

In an interview for BBC Radio 4’s Today Programme, Sir David Nicholson, former chief executive of NHS England, who retired last year, spoke of a ‘substantial financial problem’ particularly in the hospital sector, which would become ‘crystal clear’ in the autumn. He predicted the scale of the problem would exceed that inherited in 2006, when the health service had accrued a £1bn deficit. And he warned that the NHS would have to take ‘emergency action’ such as vacancy freezes. 

“It will…mean the politicians having to suspend some of their ambitions about the new things they want to do while some of the money that's being promised to the NHS is spent dealing with that particular operational problem,” Sir Nicholson told the BBC.  

He added: "I have not heard in most of the conversations politicians are having at the moment about what they're going to do about that financial hole. They want to talk about extra services and extra investment when actually there is a problem there to face."

And yet both the Conservative and Liberal Democrats manifestos include plans to inject £8 billion into the NHS, both having signed up to the five-year plan drawn up by current NHS chief executive Simon Stevens. While Labour has pledged a £2.5 billion Time to Care fund paid for by mansion tax and tobacco levies. 

In addition, the International Monetary Fund today forecast a £7 billion deficit by 2020 for the UK, compared with the Office for Budget Responsibility’s forecast made at the last budget for a surplus of £7 billon. According to the BBC, yesterday, a senior Tory had said the OBR’s projected surplus would help cover the NHS commitment. Today’s announcement from the IMF now casts doubt on the feasibility of the promised £8 billion boost for the NHS. 

Earlier this week The Kings Fund had also questioned how the £8 billion a year, called for in the NHS Five Year Forward View, could be met. Even with extra funding, the service would still need to deliver ‘herculean productivity improvements’, its chief executive Chris Ham warned.

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