In recent years, NHS spending has been protected while other budgets, such as those for local government services and policing, have been subject to significant cuts. Despite this, health services are facing unprecedented financial and operational pressures, with many NHS organisations in deficit and performance against key standards deteriorating.
Demand for health care is rising for several reasons: the population is increasing; more people are living longer, often with multiple long-term conditions; and technological advances mean that new treatments are available. As a result, health services are treating more people than ever before. For example, between 2003/4 and 2015/16, the number of admissions to hospital increased by 3.6 per cent a year.
At the same time, the NHS is enduring the most prolonged funding squeeze in its history. Between 2015/16 and 2020/21 funding increases will average 0.7 per cent a year in real terms, compared to the long-term average of approximately 4.0 per cent a year since the NHS was established.
The mismatch between increases in activity and in funding is creating significant challenges. All areas of the NHS are affected, with acute hospitals, general practice, mental health and community services all under pressure. In December 2016, NHS Improvement forecast that NHS trusts would end 2016/17 with a potential deficit in the range of £750–£850 million, despite the injection of £1.8 billion of sustainability and transformation funding. At the same time, performance against key waiting time targets is deteriorating, there is evidence that access to some health services is being rationed and quality of care in some services is being diluted.
Full article from The Kings Fund, 12 May 2017