Hospitals set to lose £2bn a year from budgets from April 2015

Hospitals set to lose £2bn a year from budgets from April 2015 Money to be used to fulfil ministerial pledges to promote closer integration of health and social care services.

Hospitals could see their budgets fall by £2bn, despite growing demand for their services such as A&E care, the head of the NHS in England has warned.

Acute hospitals will get £2bn a year less between them from April 2015 as the money starts being used to help create a new fund to fulfil ministerial pledges to promote closer integration of health and social care services.

Without the move the NHS will no longer be sustainable after 2015, Sir David Nicholson, chief executive of NHS England, told bosses across the service.

Hospitals, groups of GPs and other healthcare providers will be able to apply for money from the integration transformation fund (ITF) to put on new services as long as they plan to collaborate with social care providers.

The money should be used to relieve the growing pressure on the NHS by improving services outside hospitals, such as schemes to avoid patients needing to go into hospital, early intervention to prevent illness deteriorating to a critical point and enhancing the supported early discharge of mainly elderly patients, Nicholson suggests.

"The ITF is a game-changer. It creates a substantial ringfenced budget for investment in out-of-hospital care. However, it will also require us to make savings of over £2bn in existing spending on acute care. This implies an extra productivity gain of 2-3% across the NHS as a whole in 15/16", he said.

Hospital bosses – who are already struggling to deliver the £20bn of efficiency savings by 2015 required by the four-year "Nicholson challenge" and are facing rising demand for healthcare – are likely to react with concern to the move.

Nicholson also warns that hospitals will start to lose some of the £2bn from next April, a year early, in order to avoid what he calls "a financial cliff edge in 15/16".

Matt Tee of the NHS Confederation, which represents hospitals, said it backed the drive to care for more patients outside hospitals.

Nicholson's move "highlights the urgent need for consensus about the challenges the NHS faces and agreement in how and where healthcare is delivered in the future, as growing demands and limited funding mean the current model is probably unsustainable", he added. The Guardian