A report by NHS Providers warns that filling the gaps that have opened up in the health service after almost a decade of austerity will account for much if not most of the new money recently announced by the prime minister.

The NHS funding settlement: recovering lost ground informs the debate on how the additional money should be spent to deliver the best deal for patients and service users, and for the taxpayer.

The report offers a realistic assessment of the likely costs of restoring performance in the hospital, mental health, community and ambulance sectors, so the health service can sustainably deliver the standards of care the public rightly expects, as outlined in the NHS constitution.

The NHS must strike the right balance between these priorities if the forthcoming 10 year plan is to succeed.

This report is designed to help to shape decisions on what it will take to recover performance alongside the other main priorities: keeping up with growing costs and demand for treatment, transforming the way the NHS delivers care, and offering improvements in key areas such as cancer and mental health.

The NHS must strike the right balance between these priorities if the forthcoming 10 year plan is to succeed.

The health service wants to transform and improve, but it is clear that recovering lost ground would take up a large chunk of additional NHS spending, severely restricting the options for other key priorities.

The report sets out illustrative costs of closing financial and performance gaps that have opened up across a range of key pressure points:

Cutting delays for routine operations

The report says growing delays have been bad for patients, who have suffered from lengthening waiting lists and last-minute cancellations.

Recovering the 18-week target for routine operations would cost £950 million a year for three years.

Recovering the 18-week target for routine operations would cost £950 million a year for three years.

The chief executive of an acute hospital trust said:

“For many of us last winter was the first time we failed to meet the 18 week target, but it has been more difficult each year because of conflicting priorities. The cancellation of operations last winter means it will take us time to recover if all goes well, and we are now watching the 52 week waits carefully having never had 52 week breaches.”

More beds to meet A & E target

The report concludes that last winter the NHS did not have enough hospital beds to cope safely with growing demand for care. As a result, patients encountered increased delays and a sharp rise in mixed sex accommodation.

Funding for the equivalent of an estimated additional 7,825 hospital beds needed to cope safely with these pressures would cost almost £900 million.

Funding for the equivalent of an estimated additional 7,825 hospital beds needed to cope safely with these pressures would cost almost £900 million.

The chief executive of an acute hospital trust said:

“An aging population and a lower bed capacity than other countries need to be addressed realistically, especially as the social care offer is reducing in real terms  and we need a proper move to much lower bed occupancy to ensure patients can move quickly and efficiently through different stages of care.”

Restoring staffing levels for key groups

Pressures on mental health, community and ambulance services are just as great as those in the acute hospital sector.

Restoring the mental health and community nursing workforce to 2010 levels, before the funding squeeze began, would cost nearly £350m a year for the next three years, before even starting to address the unmet need and increased demand for care.

The chief executive of a mental health trust said:

“We need more staff at a time when the age structure of the mental health workforce - especially in nursing - is a ticking time bomb, especially as many can still retire at 55.”

Fixing the maintenance backlog

Trust leaders say that restricted spending on maintenance is starting to affect their ability to deliver safe care for patients because facilities do not meet modern standards and are deteriorating.

Tackling high and significant backlog maintenance on the NHS estate would cost at least £1.2 billion a year for three years.

The chief executive of an acute hospital trust said:

Tackling high and significant backlog maintenance on the NHS estate would cost at least £1.2 billion a year for three years.

“We recently had to go on A & E divert because all the bed lifts in the hospital broke down. And at our other site a major thunderstorm caused £150,000 of damage because water got into a lift mechanism causing it to catch fire. It takes 20 weeks to fix a 1930s lift”.

The report also assesses the cost of:

• clearing the NHS provider sector deficit
• reducing unsustainable one-off savings
• reversing cuts to unprotected health budgets including public health and workforce development
• funding pay rises for doctors
• further targeted spending to reduce delays in transferring people who are medically fit to move on.

The deputy chief executive of NHS Providers, Saffron Cordery, said:

“The prime minister’s NHS funding commitment, taking average annual increases over the next five years to 3.4 per cent, is welcome, as is the decision to invest before the comprehensive spending review.

“But set against experts’ estimates that 3.3 per cent would be required just for the NHS just to stand still, it poses big questions about future priorities which will have to be addressed in the NHS’ 10-year plan.

“This report highlights the scale of the challenges the NHS faces in recovering the lost ground that has built up over the longest and deepest financial squeeze in NHS history.

“It is striking how these pressures are being felt right across the system, in hospitals, mental health, community and ambulance services.

“We would be fooling ourselves to think there are any simple short cuts to recovery.

These findings will help frame the debate about what can be devoted to recovery alongside other important priorities

Saffron Cordery    

“These findings will help frame the debate about what can be devoted to recovery alongside other important priorities such as transforming the way services for patients are delivered, and improving care for mental health and cancer. 

“We are ambitious for the NHS, and will work with others to develop a positive plan for the future. The public deserves nothing less.

“But we must avoid repeating past mistakes. The plan must be realistic, and must have the backing and involvement of the NHS front line leaders who have to actually deliver the plan. ”

Notes to editors

We have had to make some assumptions in our calculations including:

• the provider sustainability fund is recurrent
• workforce is available to recruit as required
• additional pension costs are covered
• specific issues affecting local areas have not been included.

Read accompanying articles from David Williams and Saffron Cordery.