NHS needs ‘significant’ uplift or faces cuts in areas Labour hopes to improve

The NHS is heading for a “significant overspend” this year, experts have said as they warned about potential cuts to parts of the health system which ministers have vowed to improve.

Labour has pledged to take the NHS from “analogue to digital” and make a shift towards preventing ill health from happening in the first place when it publishes its 10-year plan for the health service next year.

But the Nuffield Trust has warned that the health service is is heading for an “unfunded overspend of £4.8 billion” this financial year.

The predicted overspend has been “principally driven by higher-than-planned-for staff pay deals”, the think tank said.

Without more money, cuts to services are “inevitable”, it said.

This could include service cuts in public health – which is considered the strand of the health system responsible for the prevention of ill health, among other responsibilities – and to the NHS’s technology budget.

Experts from the Nuffield Trust said that Chancellor Rachel Reeves will need to increase the overall health budget by 3.6% “just to manage current day to day cost pressures”.

This is the minimum amount needed to shore up spending this current financial year, they said.

More money will be needed in the longer term to deliver planned staffing increases and keep up with the healthcare demands of an ageing population, the Nuffield Trust said.

Sally Gainsbury, Senior Policy Analyst at the Nuffield Trust, said: “This year, largely driven by an inadequate budget settlement in March, the NHS has already had to receive top-ups from the DHSC (Department for Health and Social Care) budget, just to keep day-to-day services running.

“But even with those top-ups, the NHS is heading for a significant overspend this year unless eye-wateringly high and historically unprecedented efficiency savings can be made.

“At a time of extremely tight public finances, it would be tempting to hope that a large funding increase next Wednesday could deliver the reforms needed to improve the NHS for the future. But this is a service that is running to stand still.

“If it is overspent to the tune of £4.8 billion at the end of this financial year, this will likely mean further cuts to non-NHS budgets like public health and technology, achieving the very opposite of the laudable aims to prioritise improvements in these areas, announced for the Government’s 10-year plan.”

The health think tank has published a briefing paper which highlights how in recent years the NHS England budget has been topped up in-year by transfers from the wider Department for Health and Social Care budget, which has “already been squeezed with a real-terms funding cuts”.

The NHS has already needed “top-ups” this financial year, it adds.

A Government spokesperson said: “We do not comment on budget speculation. We will ensure the NHS has the funding it needs as we build a health service fit for the future with our 10 year health plan.”