The NHS has a 'substantial financial problem'

The former Chief Executive of NHS England Sir David Nicholson has revealed the NHS is accruing large deficits, which are largely being ignored by politicians

It is no secret the NHS is in crisis. Over the last 12 months, hospitals have warned of problems with growing demands for services, as well as failures to meet waiting time targets. Cuts to budgets have had a significant impact on the ability of healthcare services to deliver what is needed.

Now, Sir David Nicholson has warned the NHS in England is facing a “substantial financial problem”. He also warned politicians are ignoring the issue in the election campaign.

Sir David, who retired from his position as chief executive of NHS England last year, said the deficits would become “crystal clear” in the coming months. He said that politicians on the election campaign trail were focusing on the wrong areas by discussing expanding services, rather than talking about how to address the existing issues. He said the situation was a cause of “very great concern”.

Sir David, who ran the NHS in England for eight years, said due to the election period the NHS is unable to publish its latest financial report, but he said it was “pretty clear in the NHS that there is a substantial financial problem, particularly in the hospital sector” and this would become “crystal clear” in the autumn.

The scale of the problem is expected to be bigger than the one he inherited in 2006 when he took the role of chief executive. At that time the NHS had a £1bn deficit.

“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,” he said.

“They want to talk about extra services and extra investment when actually there is a problem there to face.”

Sir David said it was possible the NHS would need to take “emergency action”, such as job freezes.

“It will also 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.”

Last autumn, Simon Stevens, who replaced Sir David, set out a five-year plan for the NHS. In it he said the health service needed to find an extra £8bn by 2020. This is something both the Conservatives and Liberal Democrats have committed to in their manifestos. However, this figure was based on the fact the NHS could save £22bn through efficiency measures.

Sir David said this would be difficult to achieve as the NHS has already made significant cuts by restricting pay and reducing management costs. He added that savings could only be made by “changing the way we deliver services”.

Without savings, the NHS will fall into a “managed decline”, he said. This would result in patients having to wait longer for treatment. New drugs would also be less likely to be available straight away, and it would become more difficult to see a GP.

Chief Economist at the Health Foundation Anita Charlesworth agreed with Sir David’s assessment. She said: “NHS finances can only be described as dire at the moment, three-quarters of our hospitals can’t balance their books and at the turn of the year they were running a deficit of £900m.

“The outlook in the medium term is also really challenging, [the NHS] needs extra funding each and every year.”


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