By Gerri Peev
Last updated at 7:29 AM on 27th December 2010
Warning: Letter to Danny Alexander said the government is complacent about the pace of reform needed to hit efficiency targets.
Patients will face longer waiting times if ministers do not increase health budgets to plug a looming £10bn shortfall, Whitehall experts have warned.
A damning letter to Chief Treasury Secretary Danny Alexander warned the government is complacent about the pace of reform needed to hit efficiency targets.
The Independent Challenge Group, which was set up to scrutinise Whitehall thinking at the time of the spending review, said ministers will face an ‘unpalatable trade-off’ between longer waiting times for patients or having to increase the health budget.
Social care budgets could be in line for ‘even greater’ cuts than the anticipated £3.4 billion reduction and cancer research funding could also be affected, it warned.
It also said that the government would have to stop its ‘very bad policy’ of hiring all doctors on graduation.
The letter, obtained by the Guardian, said that plans to hand power of commissioning health services to GPs could at best have ‘patchy’ results.
Healthcare costs are expected to rise from the current £100bn a year to £126bn by 2014/5. This would leave a shortfall of £10bn a year based on projections that health spending should cost around £115bn a year.
The letter said proposed savings of £16bn a year under the Quality, Innovation, Productivity and Prevention (QIPP) programme, which is the body that will push through efficency savings, ‘may not be achievable’.
It comes as Health Secretary Andrew Lansley faces more pressure to deliver on his reforms: the NHS is one of just two areas of government spending that was protected from severe cuts, the other was international aid.
Funding charities such as Cancer Research UK to the tune of £200 million a year was also unaffordable, experts warned.
Andrew Lansley: Running a ¿rogue department and operating in isolation from his colleagues¿, claimed shadow health secretary John Healey
The letter was written by Adrian Beecroft, the former chief investment officer at APAX private equity group; Legal Services Commission boss Carolyn Downs and director of climate change adaptation at the department of energy and climate change, Robin Mortimer. The experts warned the the NHS could ‘face a significant budget shortfall by the end of the SP [spending] period’.
‘The NHS typically deals with such shortfalls by limiting treatments, leading to increased waiting times. The government will be faced with a choice between dealing with the fallout from increased waiting times or increasing the DH’s budget, perhaps by as much as £10bn per year. To avoid this unpalatable trade-off, the DH settlement needs to build in much greater non-QIPP efficiency savings from the outset.’
A department spokesperson said: ‘The independent challenge group was established as part of the spending review process. The points raised by the group were considered as part of the spending review process. Its work has now concluded.
We consulted on our reforms and received a huge number of responses: over 6,000.
These have helped us to refine our plans. We have responded to concerns around implementation and are testing several areas of reform to make sure we have the best arrangements in place.’
Labour’s shadow health secretary, John Healey, said the letter was evidence that the ‘high-risk, high-cost reorganisation Andrew Lansley is forcing on the NHS is a massive distraction from improving patient care and making the sound efficiency savings Labour previously planned’.
He added that it confirmed Mr Lansley was running a ‘rogue department and operating in isolation from his colleagues’.
Prime Minister David Cameron has asked his minister Oliver Letwin to keep a closer eye on Mr Lansley’s progress with health reforms.
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