The £2 billion NHS funding gap made headlines this week. It’s a story we will probably hear every year from now on, with the amount getting slightly bigger each time. Two graphs from the King’s Fund report earlier this year explain why.
Firstly, the NHS isn’t getting anywhere near the level of funding it used to. The King’s Fund reckons, depending on how you measure it, rising costs and demand mean that NHS spending runs somewhere between 3 and 6 percent above the rate of inflation. In other words, it needs at least a 3 percent real-terms increase just to stand still. With a simple inflation-linked budget increase, then, eventually the NHS will either run out of money or have to stop delivering some services.
Unless, of course, it can make up the difference through efficiency and productivity improvements. This brings us to the second chart. The productivity improvements needed are massive and way…
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