Balancing budgets or protecting patient safety

The NHS is a quarter of the way through what is expected to be a decade of austerity, with funding not increasing other than to cover the costs of inflation. Surveys carried out by the King’s Fund show increasing pessimism among finance directors about their ability to deliver the unprecedented savings required under the so called Nicholson challenge.1 Although the NHS is living within its budget at an aggregate level, an increasing number of providers are in deficit.2 Many more are struggling to deliver government targets, such as the requirement that 95% of patients should be seen and treated in hospital emergency departments within four hours.

NHS funding in England has been protected by the government relative to other areas of spending, which have seen deep cuts. Local authorities have borne the brunt of these cuts, with their grant support from central government cut by at least 30% since 2010. These reductions have affected social care and other services, despite some funds being transferred from the NHS to protect priority areas of social care.

The government’s spending review in June signalled further cuts in local authority budgets, with a 10% cut in central government grant support in 2015-16. Partly to offset the effects of these cuts on social care, the chancellor of the exchequer announced …