The effects of underfunding and cuts

A growing number of health care leaders are expressing concerns about a funding crisis in the NHS. For instance, in November 2015 the chair person of St George’s Hospital Trust in London warned that the NHS faces “wide scale financial collapse” if the government does not provide at least a further £4 billion each year. Similarly, NHS Providers, the body that represents hospitals across England fears that the NHS is close to breaking point because of its escalating cash crisis as a result of years of underfunding. According to NHS Provider’s Chief Executive,

“the NHS is increasingly failing to do the job it wants to do and the public needs it to do, through no fault of its own.”

And because the funding is ‘front loaded’ (i.e the amount is higher in the earlier years), the Director of Policy at the King’s Fund has said

“The government will either need to find more money for the NHS in 2018-19 and 2019-20, when funding will barely increase in real terms, or else be honest about what the consequences of not doing this are likely to be.”
(cited by the Guardian, 1.11.16, p.15)

Similarly, in October 2016 members of the House of Commons Health Select Committee said that the NHS is “doomed to fail” without financial investment.

Findings from a 2016 study of 99 Clinical Commissioning Groups (CCGs) – around half of those in England – indicate the extent of the cutbacks that are planned over 18 months:

  • one in three CCGs expect to close or downgrade Accident and Emergency departments,
  • one in five expect to close consultant-led maternity services, forcing women in labour to travel further,
  • more than half intend to close or downgrade community hospitals,
  • 46 per cent are planning an overall reduction in inpatient NHS beds,
  • one-quarter expect job cuts in hospitals, and
    almost one-quarter expect to close inpatient paediatric departments. (

Over the past 26 years the number of available hospital beds in England has more than halved, especially those for people with learning disabilities, mental illness and for the longer-term care of older people. Statistics from the Organisation for Economic Co-operation and Development show that among 23 European countries, the UK has the second lowest number of hospital beds per capita – and this is before the bed closures that NHS England expects to see set out in the new footprints’ STPs (

And even before these closures there has been an increase in intensity with which beds are used: occupancy rates for acute beds increased from 87.7 per cent in 2010/11 to 89.5 per cent in 2014/15. And, according to Freedom of Information requests, towards the end of 2016 there were some NHS Trusts where the occupancy rate was as high as 97 to 100%. The National Audit Office has suggested that hospitals with average bed occupancy rates above 85 per cent will have regular bed shortages, periodic bed crises and increased numbers of health care-acquired infections ( The stress on staff will also be severe.

Bed crises have arisen in part from cuts in funding for social care, leaving vulnerable people, like the elderly, at risk. It’s meant people are relying more and more on A & E departments, hospital admissions are increasing, and there are severe problems with discharging patients home: between April 2012 to July 2016 there has been a 70% increase in those unable to be discharged because of lack of support at home (

At the same time, despite of a growing need for residential care for an ageing population,  the total number of beds in care homes fell by 19,490 over the years between 2010 and 2016. Many providers of care homes are pulling out of the sector because they can no longer make enough profit. Costs have increased because, e.g. of the introduction of the national living wage (NLW),while cash-strapped local councils can’t pay providers higher fees.  The Care Quality Commission is concerned that more and more home closures could leave needy, vulnerable older and disabled people with nowhere to go. (

With a deficit of over £2 billion forecast for NHS providers (e.g. Foundation and NHS Trusts) during 2015/16, NHS Improvement – the organisation that oversees service providers – is saying that the NHS is unaffordable. It is therefore asking providers to

  • cut costs,
  • fill only essential vacancies,
  • reduce staffing levels
  • adopt safe staffing guidance “appropriately and proportionately” (work on national guidance for safe staffing levels has already been stopped),
  • transfer patients to where there is spare capacity, and
  • consider the financial impact of managing waiting lists as well as patient experience (in other words, make patients wait longer in all but exceptional circumstances).

It seems that balancing the books is taking priority over staffing levels and patient safety (see and

Some health leaders are also talking about the necessity in future to stop funding a wide list of procedures on the NHS, including hearing aids, cataract operations, vasectomies, and hip and knee replacements, if not withdrawing treatment from patients with ‘unhealthy lifestyles’ (

Repeatedly, the government’s message is that managers are not to cut frontline services. But it has quickly become evident that many Trusts cannot find ways of reducing costs without cutbacks to patient services. Cuts are also being imposed through the use of referral management centres. Without seeing patients, these centres reconsider the referrals that GPs have made when they decide that a patient needs to be referred for secondary care (eg to a hospital).  They’ve been criticised as putting cost savings over patient care. A recent report by the Royal College of General Practitioners has found that there is no evidence that referral management centres are cost effective – in fact they may increase costs by necessitating additional GP appointments –  but they undermine the decisions that GPs have made in the interests of their patients and erode the trust patients have in their doctors. They also further fragment the NHS and the patient journey.

Following its Five Year Forward View,  NHS England has required that the NHS in England is divided into 44 local health economies or ‘footprints’  each of which must produce a Sustainability and Transformation Plan that will restructure services and reduce costs. Many of these proposed Plans are expected to achieve savings by replacing health care professionals with less qualified staff. The Health Services Journal, for example, has collected data from a sample of one in four STPs suggesting that savings rely heavily on job cuts, with a 2.3 per cent fall in registered nurses, and a 1.6 per cent reduction in all jobs. Applied across England, it would mean reducations of around 17,300 staff in total, including 7,300 nurses, midwives and health visitors.

Further information

For information on the stopping of evidence-based work on setting safe staffing levels, see

updated November 2016

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