Call for £9bn NHS transformation fund to make savings

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Two think tanks have called for the NHS to have a transformation fund, at a cost of £9.4bn to help it improve efficiency and develop new models of care.

The proposed fund would initially work to help the NHS make the savings of £22bn recommended in the five year forward view.

The fund would require between £2.1bn and £1.5bn annually between 2016/17 and 2020/21, at a cost of over £9.4bn for the first phase.

The call from the Kings Fund and The Health Foundation has been made in a report Making change possible: a Transformation Fund for the NHS.

A second phase of the fund beginning would put the development fund's ideas into practice, the report warns it is not possible to estimate the costs until new models of care have been tried out.

Anita Charlesworth, chief economist at the Health Foundation, said: "The Department of Health's annual accounts and report published today confirm that spending pressures in the health service are outpacing funding - business as usual was not affordable in the last financial year and it's even less affordable this year.

"In the last financial year alone spending on agency and temporary staff proved to be the financial Achilles heel of the health service - growing by over 27% in one year alone.

"The NHS also had to cut £640m of planned capital investment and receive an additional £250m from the Treasury to cover day-to-day running costs.

"NHS providers (hospitals, mental health trusts and community health services) had an underlying deficit of at least £1bn.

"This was the result of spending pressure growing at a faster rate than their income. In addition, NHS bodies who commission care continued to spend more resources on non-NHS providers, meaning spending on care provided free at the point of use to NHS patients by private sector providers grew by almost £500m.

Charlesworth added: "Clearly the system is already having trouble balancing demand pressures and constrained funding.

"The health service needs transformative change to improve its efficiency. This is why we, alongside the King's Fund, are calling for a Transformation Fund, to deal with the urgent need for service change.

"This won't happen by accident and ever tougher grip and pressure from Whitehall won't deliver.

"What the NHS urgently needs is practical support and dedicated resources to make the changes that will unlock the efficiency opportunities that undoubtedly exist across the service."

Further reading 

Summer Budget 2015: 'Our priority is the NHS' - Osborne

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