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Funding for the NHS 

PA Consulting Group’s Mark Horncastle, a healthcare expert, has been interviewed on BBC Radio 5 Live’s Wake up to Money programme. Mark discusses funding for the NHS in response to a statement made by Sir David Nicholson, who ran the NHS in England for eight years and retired last year, that the NHS in England was accruing large deficits which would become "crystal clear" later this year.

Mark is asked why this is the case, despite having its budget increased in real terms over this parliament. He explains: “The background to this is the NHS journey over the last five years. It has had 0.8 per cent real term growth per annum over the course of this parliament and the NHS has also delivered £20 billion worth of savings in the same period. The challenge the NHS is facing is that there is an increase in demand because of an ageing population and because people are living much longer with more complex care needs. This means that the increase in funding means the NHS is just standing still and this is creating the funding gap.

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Mark goes on to explain that the NHS believes it can deliver £22 billion worth of efficiency savings over the course of the next parliament. Mark is asked why the NHS hasn’t realised this type of savings before: “It has already delivered £20 billion of savings over the last five years. However, this means that the real challenge is that lots of efficiency gains have already gone through the system. On the current predictions, a 2 to 3 per cent productivity gain is required each year.”  

Mark is then asked if making the required savings is possible: “It is a very challenging position that relies on more efficiency gains but also on more effectively delivering new ways of working. Can the NHS and social care services, for example, work together differently to deliver care in a more cost effective way.”

Asked about the debate around privatisation of the NHS, Mark explains: “According to 2013 figures, 6 per cent of NHS budget is delivered through non NHS provision. That can be private companies, charities, local authorities or social enterprises providing NHS services.”

Finally, Mark is asked if the £30 billion gap in funding can be closed: “It does provide a large problem and what’s required is a transition fund to allow short term investment in the NHS to enable changes to happen. Ensuring that hospital doctors and GPs can work more collaboratively and that the NHS and social services can work more effectively together. There is also a huge opportunity by reducing the variation of how services are delivered in the NHS. More effective procurement processes would take a lot of cost out.”

You can listen to the interview in full here. Mark is interviewed 23 minutes into the programme. 

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