The NHS will face a ‘significant’ funding shortfall if the government’s NHS productivity targets are not met, according to analysis from the Health Foundation.
In the think tank’s response to the Treasury’s spending review, it said that if productivity only increases in line with the long run average of 1% between 2021/22 to 2028/29, the NHS will need funding of £211 billion by 2028/29.
If the NHS achieves the government’s target of 2% productivity growth, the NHS budget would need to rise to £198bn by 2028/29.
Currently, the government has allocated £183bn for the NHS in England in 2025/26. However, the spending review is due to allocate funding up until 2028/29.
The submission also recommended a new category of prevention spending, and urged the government to set up a review to establish definitions and agree a mechanism to count and track prevention spending across government departments.
It follows calls from NHS Confederation last week to agree a metric for shifting care closer to home to help leaders assess and report on progress.
The Health Foundation’s analysis also called for average annual funding growth of 3% to meet the needs of a growing and ageing population, and a 10.2% increase in capital spending to compensate for a decade of low investment.
Anita Charlesworth, senior economic advisor and co-chair of the Health Foundation’s NHS productivity commission, said: ‘The government has set a huge task for the NHS to consistently deliver 2% annual productivity growth. Our new analysis underlines how important it is for the NHS to improve productivity and the potential funding shortfall that could emerge if it doesn’t.
‘If the NHS is unable to meet the government’s target then this could create a significant fiscal headache for government who will be faced with either having to find the money from elsewhere or scale back what the NHS is able to deliver.’
She added: ‘Capital spending on new buildings, equipment and technology in the Spending Review will be key to help boost productivity over the long term but reform to create the conditions for boosting productivity is just as vital. A key factor will be how quickly investment can be translated into service improvements.
‘Much is now riding on the forthcoming 10-Year Health Plan. The government’s ambitions to reduce waiting times, boost community-based services, increase the use of digital technology, and prevent ill-health are the right ones. But achieving these ambitions will require significant investment in the NHS in the forthcoming Spending Review, accompanied by a relentless focus on boosting productivity.’
The 10-year health plan is due to be published this spring.
