Government 'warned' over NHS cuts, leaked letter shows

Image caption, The letter warned that the NHS could face a significant budget shortfall

The Department of Health was warned by advisers that the NHS could face a budget shortfall of up to £10bn a year unless it delivers greater efficiency.

In a letter seen by the Guardian, the Independent Challenge Group also said savings for England as projected might not be achievable.

The DH said the issues in the letter dating from September had been addressed in the Spending Review.

Labour said it suggested the health secretary headed a "rogue department".

'Greater savings'

The letter, sent to Treasury Chief Secretary Danny Alexander, questioned whether efficiency savings from quality, innovation, productivity and prevention (QIPP) would be achieved.

It also raised concerns about the cost of the switchover to the government's flagship policy of GP commissioning.

The letter said: "Taken together, the NHS could therefore 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."

'Massive distraction'

Shadow health secretary John Healey said the letter highlighted the risks in plans to reorganise the NHS based on GP commissioning.

He said: "This Treasury document is extra evidence that the high-risk, high-cost reorganisation [Health Secretary] Andrew Lansley is forcing on the NHS is a massive distraction from improving patient care and making the sound efficiency savings Labour previously planned.

"It also confirms concerns that the health secretary is running a rogue department and operating in isolation from his ministerial colleagues.

"For the sake of patients and the future of healthcare, David Cameron himself needs to get a grip on his government's NHS plans."

The Department of Health said the issues raised in the letter were not relevant any more.

A spokesman said: "This letter was part of the process of independent challenge in the Spending Review.

"The work has now concluded and the letter is therefore out of date - it has been overtaken by publication of the response to the white paper consultation and primary care trust allocations for next year.

"As a result of the government's decision to protect the NHS it will receive increased resources next year - an extra £2.7bn."

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