The NHS faces a real terms cut in its resources and a funding gap of around £6bn a year by 2015, The King's Fund has said.

In a report, the think tank said that instead of a 0.1 per cent rise in funds every year for the next five years, as promised by the Chancellor in his comprehensive spending review (CSR) speech, the NHS would in effect experience a cut of over 1 per cent if it tried to maintain existing levels of treatment.

The report said that the NHS would be hit by a combination of an increase of £200m to £300m in its VAT bill from next January, up to £900m redundancy pay-off costs, and the fact that the prices hospitals can charge primary care trusts have been frozen. The NHS will also struggle to make any marked improvement in productivity terms.

King's Fund chief economist John Appleby said: "Waiting times will go up and NHS management may end up telling ministers 'we simply cannot do the job, given our resources'. The funding gap in the NHS could rise to as much £6bn a year over the next five years, just in terms of what the service needs to keep up with existing demands and to maintain existing standards. The next two years will be relatively manageable for the NHS, because of pay restraint. But when that comes off then the pressures will be back on budgets."

He added: "Longer waiting times are one of the ways that hospitals and trusts can deal with the shortage of funding to meet needs. Managers may also opt to defer maintenance and repairs to help make their money go further – not mending a leaky roof, for example."

According to a survey commissioned by The King's Fund with Doctors.net.uk (DNUK), there is "significant scepticism" among doctors about the effectiveness of the government's proposed health reforms. Under 25 per cent of doctors believe the changes will improve patient care while around 20 per cent reckon the NHS will be able to maintain its focus on improving efficiency while implementing the reforms. On the plus side, more than 60 per cent of GPs believe there are GPs in their area with the capacity to lead new GP consortia.

About 25 per cent of doctors questioned though that giving responsibility for public health to local authorities would make it easier to tackle major health issues but nearly 50 per cent thought otherwise. Over 40 per cent agreed that it would be more difficult to tackle health inequalities under GP commissioning, and while 39 per cent thought the reforms would encourage closer working between GPs and hospital doctors, 36 per cent didn't think they would.

When asked how efficiency in the NHS could be improved, over 60 per cent of doctors said the best way was to improve collaboration between different health services and professionals, around 30 per cent chose reducing the range of services and treatments available on the NHS (for example cosmetic surgery, fertility treatment and treatments for obesity), just over 25 per cent opted for reconfiguring local services with cuts in some areas, and 10 per cent said reducing staffing levels would do the trick.

Anna Dixon, director of policy at The King's Fund, said: "The government is relying on doctors to deliver its health reforms. It can take some comfort from the finding that the majority of GPs believe there is capacity in their area to lead new GP consortia. But this survey highlights significant scepticism among doctors about the government's proposals and shows that ministers have a lot of work to do to convince them that the reforms will improve patient care."

http://www.publicservice.co.uk/news_story.asp?id=14544