The NHS faces the biggest funding challenge in its history

What if there is no financial knight in shining armour coming to save the NHS? What if the black hole at the heart of NHS finances, projected to reach £30bn by 2021, stays empty? What would the NHS do, and what would be the effect?

More than money: closing the NHS quality gap, published this month, explores these questions. In particular, in line with the Health Foundation’s focus on improving quality, we’ve zoomed in on how quality could be affected in such a scenario – and how you stop that happening.

‘There is a chasm between current political rhetoric and the reality of the financial situation facing the NHS’

So what if there was no more money, and the NHS had to live within its means? Other countries have been there and had to make wide ranging changes in order to balance the books.

Regional health budgets in Spain fell on average by 5 per cent between 2010 and 2012. Salaries were slashed by 7 per cent, the training budget was reduced by three quarters. A range of services were closed, from out of hours primary care to operating theatres. Patient charges were increased, and new ones introduced.

If anything, Ireland’s response was even more drastic, with real terms spending per capita falling by 8.7 per cent between 2008 and 2012. Starting salaries for nurses were cut by 20 per cent, and 30 per cent for consultants. Nursing numbers fell by 1,600 (4 per cent).

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Going back further, in the early 1990s Canada chose to respond to a financial crisis through a major reconfiguration of the hospital sector. The number of beds was successfully reduced, but promised parallel investment in out of hospital care never followed to the same extent.

Political silence

So far, so unappealing. The Health Foundation and the Foundation Trust Network held a workshop with 25 senior leaders from 25 NHS and foundation trusts to explore what they would do in order to ensure a hypothetical trust forecasting a deficit broke even in the short term.

‘All the ingredients for a crisis in the NHS are starting to assemble but it is avoidable’

Responses were very similar to those seen internationally: reducing the staffing bill, missing access targets, stopping capital projects and cutting training budgets. While participants were united by a commitment to maintain safety and quality of care, there was a strong feeling that this would not be possible across the board, with access and patient experience likely to crack first. One trust chair summed up the need to prioritise: “This is Mini versus Rolls Royce. Can we provide the Mini version? It still gets you from A to B.”

Is this what lies in store for the NHS? There is certainly no indication that a mixture of reductions in quality, brutal cuts to wages, and increased user charges are what any politician sees as being the resolution to NHS finances.

In fact, there is a chasm between current political rhetoric – the need to increase staff numbers, spending tens of millions on making it easier to see your GP, reducing hospital car parking charges – and the reality of the financial situation facing the NHS. While this might be politically expedient, it does little to help the NHS prepare for one of the biggest challenges in its history. If not the biggest.

Political choices

With finances deteriorating rapidly and key areas of quality (such as accident and emergency waiting times) reducing, all the ingredients for a crisis in the NHS are starting to assemble.

‘There will always be a gap between the quality the NHS could achieve and what it does’

However, such a crisis is entirely avoidable. How much funding the NHS receives is a political choice. It is almost certain that without additional ongoing resources the NHS will be unable to maintain the current quality and breadth of services. There will always be a gap between the quality the NHS could achieve and what it does.

That gap is already unacceptably wide, with far too much variation between and even within providers. However, without an adequate response to the financial challenge there is a real risk this ‘quality gap’ will grow ever wider.

More money is needed, but can only ever be part of the answer. Money without change will perpetuate care as currently provided, missing out on opportunities to narrow the quality gap and improve productivity.

There is an emerging consensus about the new models of care the NHS should move towards, centred around greater integration, a focus on care pathways and shared decision making with patients. Monitor have estimated that introducing these new models, together with increasing efficiency within existing services, could lead to productivity savings of £10.6bn-£18bn by 2021, representing 35-60 per cent of the funding gap.

Missing a strategy

The question is not whether change is needed, but how it can be supported to happen. We argue that three forms of support are needed.

‘Four years into austerity, dedicated support to help providers is not in place’

First, support from politicians for change, and development of a new narrative that the status quo is unsustainable. Our politicians could follow the example of their counterparts from the Netherlands, Canada and Denmark, who spoke clearly about the reality of their financial situation.

Second, a transformation fund to support the development of new services and the improvement of existing ones. Moving to new ways of delivering care needs resource; without a specific ringfenced amount of funding the changes needed won’t be delivered.

Third, dedicated improvement support for providers. At a time where change isn’t an option, where is the improvement strategy for England? Where is the dedicated support to help providers? We need to stop thinking of providers solely as autonomous units and look at how the NHS system as a whole can be best geared to help change happen.

Four years into austerity, these forms of support are not in place. They need to be now so we can face the financial and quality challenges ahead.

Richard Taunt is director of policy at the Health Foundation