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Finance experts warn on NHS future

The range of services available free on the NHS should be reconsidered, financial experts have said, after research suggests that the health service is facing a decade of austerity.

Public funding for health is set to be tight for at least 10 years, the Institute for Fiscal Studies (IFS) said. In a report mapping the longer-term financial challenge facing the health service, researchers claim NHS spending to 2015 will be the tightest four-year period in the last 50 years.

The research, funded by the Nuffield Trust, concludes that "serious thought" must be given to NHS spending including reconsidering which services should be freely available or the level of taxation needed to finance the service in the future.

The authors of the study said that continuing the real freeze in English NHS spending between 2015 and 2017 would mean cutting spending on other public services by an average 2.3% a year.

NHS spending in the UK reached £137.4 billion in 2010/11, the authors said, with the spending in England accounting for a quarter of all public spending. The report states that increasing health spending in line with national income between 2015 and 2022 would still leave the NHS budget growing less quickly than what is needed to care for an ageing population.

IFS deputy director Carl Emmerson, who co-wrote the report, said: "The last decade saw the NHS receive large increases in its funding, but the outlook for the 2010s is in sharp contrast to this. The current spending plans that run to March 2015 are tighter for the NHS than any delivered in the last 50 years, and the outlook for spending on public services beyond this suggests that, if it grows at all, NHS spending is not likely to keep pace with the amount that it has been estimated it needs to keep pace with the costs of an ageing population."

A Department of Health spokesman said: "We know that the NHS can, and must be, more efficient to meet the demands of an ageing population and increased costs for developments in drugs and medical technology. Where the NHS can do things better and save money to reinvest in high-quality patient care, it must do so.

"We are already seeing results - the NHS made £5.8 billion in savings in 2011/12 while keeping waiting times low, performing more diagnostic tests and planned operations, and reducing infections even further. The NHS is showing that it can meet the financial challenge set."

NHS Confederation chief executive Mike Farrar said: "We need to be honest about the action necessary to deal with a decade of spending squeezes and the rising cost of healthcare. We need to forensically examine what services and treatments provide the best outcomes for patients and local communities, and what the NHS can and cannot afford to provide in the future.

"This will be far from pain-free, but decisive action is necessary if we are to maintain high-quality services and stay in the black. If the NHS does not change, it will not be fit for the future. We need swift action before the financial pressures overcome us."

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