Wednesday, 17 June 2009

UK - The NHS Faces £15 billion Budget Shortfall

The UK’s National Health Service (NHS) is facing a cut in funding of up to £15 billion from 2011, as a result of the economic recession and rising healthcare costs. According to the report from the NHS Confederation, released in June 2009, funding could fall by 2.5 to 3.0 per cent per annum from 2011/12, which is equivalent to a cut of between £8 to 10 billion over three years and up to £15 billion over five years.

The report, Dealing with the downturn: the greatest ever leadership challenge for the NHS?, outlines that demand is expected to continue to increase “from long-term trends in ageing, increasing disease burden from improved survival and rising fertility”, in addition to “the negative health effects of recession in areas such as mental health and alcohol use”.

There was a period of huge growth in health spending under the Labour government, which saw the NHS budget almost triple. In 2009, the NHS budget is £98.2 billion, and will rise to £102.3 billion in 2010. However, despite the surplus of around £1.35 billion in the financial year 2008/09, NHS finances will deteriorate considerably after the comprehensive spending review in 2011.

The Health Secretary, Andy Burnham, asserted that concerns over closures and job cuts were “completely premature” and claimed that focusing on prevention through promoting healthier lifestyle choices would lessen the pressure on the NHS. He also claimed that core targets, such as waiting time guarantees, would remain in place as minimum standards.

Unions, such as Unison and the British Medical Association (BMA), are concerned the cuts could lead to increased use of private healthcare providers to meet the growing demands placed on healthcare services.

Further reading - An in-depth review of the UK pharmaceutical market, which includes some background information on the healthcare system and the NHS, is available from Espicom: The Pharmaceutical Market: United Kingdom (published March 2009)

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