Thinking the unthinkable about the NHS

Talk of financial crisis in the NHS is almost as old as the service itself. And in the 30 years I have been involved in health policy I have seen crises come and go. But the current financial pressures facing the NHS look to be on a different scale, deriving not only from the usual tension between funding and demand but also from the consequences of unprecedented fiscal austerity across the public sector.

The chancellor of the exchequer’s spending review on 25 November will have huge consequences for all public services. The fact that the government has ringfenced funding for the NHS and promised it an additional £8bn (€11bn; $12.3bn) might suggest that the health service has less to worry about than other departments, which are facing cuts of between 25% and 40%. But there are worrying signs ahead for the NHS.

Getting a commitment to additional funds was a major coup for NHS England’s chief executive, Simon Stevens. However, this amount was premised on the NHS making a very substantial improvement in efficiency and in controlling demand—equivalent to at least £22bn of additional work for the same money.

Restraining pay rises to 1% accounts for up to £5bn of the …