The extra £20.5billion a year promised to the NHS will not even be enough to cover costs if the health service doesn’t become more efficient, experts have warned.
A think-tank has warned the money allocated by Theresa May earlier this year may just be spent keeping hospitals’ heads above water and paying off debts.
It was hoped the huge sum of money would improve treatments for patients but, at current spending levels, it won’t even be enough to cope with rising costs.
Staff pay rises and pensions, caring for over-75s, increasing drug prices, operating costs and hospital deficits are expected to swallow up the money.
A report published today said the NHS must become radically more efficient if it wants to use any of the money to improve patient care.
Theresa May confirmed in June the Government would increase the NHS budget by £20.5billion by 2023, claiming the commitment showed the health service was the Government’s ‘top spending priority’
The stark warning comes after damning figures yesterday revealed the winter crisis for the NHS has already begun.
Statistics showed thousands of people are waiting longer than four hours in A&E, beds are 94 per cent full and one in ten trusts had no free beds in the first week of December.
Experts and senior politicians have warned things will deteriorate over the Christmas period as the NHS faces up to its toughest winter yet.
The Institute for Public Policy Research, who produced the report, seen by The Guardian, said the funding boost was ‘generous’.
However, the body, who produced the report alongside former NHS executives, admitted the money ‘will not go far’.
It said: ‘Whilst the new funding will be sufficient to meet increases in day-to-day demand and rising costs, as well as wiping out provider [hospital trust] deficits, it will not fund significant improvements in care unless the NHS radically increases productivity.’
In the best case scenario, the report said the health service could use £5.2billion of the money for improvements.
But for this it would have to improve productivity by 1.4 per cent a year over the next five years – nearly double the average 0.8 per cent improvement.
If the current 0.8 per cent trend continues, existing responsibilities are expected to add up to £24.66billion meaning the NHS would still run a deficit.
Caring for the elderly is expected to use up a huge £16.1billion of the funding boost, at current trends.
Another £7billion would be spent on staff pay, drugs and operating costs. Hospital deficits would require £1.56billion.
The report was written with the help of consultants Ruth Carnall, the former head of the NHS in London, and Hannah Farrar, former executive of Monitor, the NHS’s financial regulator.
They said the money Theresa May promised would be fed into the health service budget by 2023 will be enough to cover day-to-day costs and not much more.
‘Theresa May’s NHS funding deal is generous but it will not go far,’ Harry Quiler-Pinner, a senior researcher at the IPPR which did the report, told the Guardian.
‘Once you’ve factored in an ageing population and the rising cost of staff and medicines, there is barely any money left in the coffers for the improvements in access and quality that the public really want.’
The increase, confirmed by the Prime Minister in June, works out as £394million a week more than the current NHS budget.
NHS Confederation, which represents senior executives in the health service, states its planned expenditure for this financial year is £126.3billion.
Mrs May said at the time the commitment marked the NHS as the Government’s ‘number one spending priority’.
However, the Prime Minister also warned that the NHS needed more than just a ‘sticking plaster’ when the boost was announced.
The Department for Health and Social Care said the funding increase was ‘historic’.
And it added more funding would in future be spent on community care in order to reduce pressure on hospitals.
A spokesperson said: ‘We’re backing the long-term plan for the NHS with a historic funding settlement of an extra £20.5billion a year to improve performance and make our health service fit for the future, ensuring every penny is spent on improving patient care.’