Promises by politicians to protect NHS spending in the future will force tax rises or cuts in the budgets of other departments, a report has claimed.
It is an “inevitable” consequence of commitments from Labour and the Conservatives not to cut NHS spending in real terms from 2011 onwards, a study by the Institute for Fiscal Studies (IFS) and charity the King’s Fund found.
Only a big hike in NHS productivity will alleviate the need for “hard decisions” about whether to cut other budgets or raise taxes over the period to 2017, the report said.
John Appleby, chief economist at the King’s Fund who co-authored the report, said the NHS was facing “the most significant financial challenge in its history”.
“Both the Labour and Conservative parties have pledged to avoid cutting NHS spending in real terms from 2011, but this will come at a big price – whether in departmental cuts elsewhere or tax hikes,” he said.
“The NHS has enjoyed unprecedented increases in funding since the turn of the century but those days will soon be over.”
He said it is “crucial” that the NHS did everything it could in the next two years to prepare for the impending “financial freeze”.
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