Comment: NHS funding gap needs urgent action

Dr Hamish Meldrum is the chairman of the British Medical Association (BMA) council
Dr Hamish Meldrum is the chairman of the British Medical Association (BMA) council

Health spending may be ringfenced, but the huge costs of the government's reorganisation and a massive shortfall in funding could lead to cuts in frontline services.

By Dr Hamish Meldrum

The NHS is already a victim of cuts, as the health select committee's report on public expenditure released today confirms.

Although the health committee says finding efficiency savings is not about cuts, this is not borne out by decisions taken on ground. Furthermore, recent Department of Health figures uncover an additional funding shortfall of £2.3 billion over the next two years, for which NHS Employers are asking staff to bridge the gap.


The NHS revenue budget for England for the next two years includes a £5.4 billion uplift, made up of £4.2 billion to cover inflation plus an intended real-terms one per cent increase equivalent to £1.2 billion. The service is also expected to find efficiency savings equivalent to £20 billion over the next four years to keep pace with growing need. However, the inflation allowance is not enough to cover all cost pressures, leaving an additional shortfall of around £2.3 billion that has been identified by the Department of Health and shared with the BMA as part of the discussions on future staff pay.

Like the health committee, the BMA is aware of the sheer scale of the unprecedented efficiency savings the government has demanded from the NHS and we agree that services will be tested to the limit.

Doctors have been working hard to help identify how services can be delivered more efficiently without affecting patient care, and are at the forefront of leading innovation and improving services that will benefit patient and reduce costs. However, doctors are also seeing widespread cuts to staffing and services. There is evidence of posts being frozen and services rationed.

Despite the government's pledge to protect the NHS budget, it would appear that the sums are wrong and there is a now an additional shortfall of over £2 billion. NHS Employers has asked staff to plug this gap by hammering their pay even further. Yet there are whole areas of NHS expenditure that seem to have special protection, such as commercial returns on investments in new drugs and PFI projects, and it is estimated that around £3 billion will be spent on the planned reforms for the NHS.

We urge the government to give greater clarity and to explain to healthcare staff, professional bodies and patients, the true scale of the savings required and to ensure the service has a proper strategy as to how it is going to find them. The strategy must involve savings falling fairly across the NHS and not just targeting staff pay.

The BMA is particularly concerned about cuts to the adult social care budget and we fear vulnerable people may suffer. With an ageing population, it is likely that the number of older people who need help and assistance will increase. While we acknowledge that the government has transferred £1 billion from the NHS to social services budgets we question whether this funding is enough.

Dr Hamish Meldrum is the chairman of the British Medical Association (BMA) council.

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