Experts give their view on the squeeze on the health budget
Karl Emmerson, deputy director, Institute for Fiscal Studies
Public spending allocations look very, very tight from April 2011. Once you take debt interest and other factors into account, total public spending may have to fall by 2.3% a year. At the moment the NHS is responsible for 18% of all public spending. So it seems inevitable it will get squeezed.
Whether it suffers a real cut in its budget remains to be seen, but it will certainly be getting a lot less than it has been used to. It may not even get the real increases seen over the 18 years of the last Conservative government. Although David Cameron says he will look to protect the NHS budget, we don't really know what that means in practical terms. But I would suggest any difference between the parties may be relatively small.
It means there's likely to be more of a trade-off between quality and quantity. If the NHS continues to grow services, it may have to reduce quality. If it maintains quality, some services may have to be cut.
One silver lining is that the NHS may be able to get away with a lower wage bill in future. Good news for services - but it won't necessarily please those working in the NHS.
Niall Dickson, chief executive, King's Fund
I think the prospects are very grim. We have got a potential window of opportunity for the next couple of years, but after that it doesn't look good.
One problem is that today's managers haven't had experience of running services that are contracting. Over the last 10 years they've been encouraged to act like [former Chelsea Football Club manager] Jose Mourinho. They've been given tons of money and told to go out and spend it and produce great results. But what we need now is not a Mourinho, but someone like Dario Gradi, the former Crewe manager who kept his team competitive for years on very limited means.
The danger is that people will reach for the traditional tools of recruitment freezes, redundancies and cutting services that slip under the radar, like prevention, public health and some aspects of mental health. But one tool that won't be available this time is slowing down demand on the system - because increasing waiting times from the current 18-week limit would appear to be politically unacceptable.
So what can be done? Greater integration of services across primary and secondary health and social care could release savings and improve quality. So could service redesign, particularly in the acute sector. The difficulty is: are politicians going to give managers and clinicians the headroom to shut down institutions in the run-up to an election?
Matthew Swindells, managing director for health, Tribal, and former senior Department of Health official
This is a catalytic moment for the NHS to reinvent itself. It's an opportunity to take a step back and say: how can we deliver a better NHS for less money?
The danger is whether or not the NHS takes the view it has in the past - that if you have less money, you have to cut services. If we pull money out, things could unravel very quickly. The move from 18 months' to 18 weeks' waiting and the elimination of queues in A&E could be thrown out of the window.
The good news is we have 18 months' notice of what's happening and the changes are perfectly possible - hard, but possible.
On the provider side, hospital and community services will have to make big steps in improving productivity. We must challenge previously accepted working practices. Our research suggests that, typically, up to a third of patients don't need to be in hospital. They could be cared for in lower-cost settings.
We also need to change the nature of the relationship with patients. The NHS must be more about keeping people well, and less about waiting for them to turn up at the doctor's surgery.
We are already seeing some trusts stepping up to this. Now we need leadership from the Department of Health and strategic health authorities. This has to be introduced rigorously and effectively across the country, not some parts doing brilliant stuff and others doing nothing.
Karen Jennings, head of health, Unison
A lot depends on which government we have. A Tory administration will want to cut back regardless, and this is a perfect opportunity to make considerable cuts in the NHS. They have clearly said they will go after pensions and will break the three-year pay deal.
If it's a Labour government, things won't be as harsh. But it's a question of degree. I am quite clear there are going to be cuts.
That will affect staff because they account for 70% of the budget. If you're going to close a service, then whichever way you look at it, there will have to be discussions about redeployment or redundancies.
But I think huge savings can be made without cutting staff or lowering standards of care. We know, for instance, some operating theatres have really efficient ways of working that meet the needs of patients, while others work to very rigid procedures. A lot can be gained through collaboration and sharing best practice.
Managers need to be imaginative in how they make these savings. If they truly engage with staff rather than just cutting back on, say, nursing or occupational therapy, they can achieve more efficient services and reduce costs. Staff will be up for that.
Lord Adebowale, chief executive, Turning Point
The current financial problems create quite an opportunity. There is less choice in whether we do things differently - we have to do them differently. That means much more effective commissioning.
The NHS will have to forge partnerships with the not-for-profit sector because we have the same thing in common. We are focused on achieving the maximum outcome for minimum costs. We create services every day that are about the individual and pull money in from wherever necessary.
What I still see, despite the introduction of "world-class" commissioning, is purchasing, not commissioning. Commissioning should be about understanding the needs of the individual and community and then producing a platform for procurement.
The NHS has an internal bias towards providing services itself. For example, increased access to psychological therapies is a great idea. But if you commission that service so only the NHS [delivers it], then you cut out the potential to provide value for money and restrict access to only one route.
People need to be risk-aware, not risk-averse. It would be a scandalous waste of taxpayers' money, for example, if health inequalities were seen as secondary because money was tight. Exactly the opposite should be the case. If you don't tackle this now, you simply create more cost further down the line.
Andrew Lansley, shadow health secretary, Conservative party
We have committed to continue to provide real-terms increases in spending on our NHS. But with the public finances in such a mess, it is clear the increases of the 2010s won't be on the same scale the NHS has seen previously.
The NHS will also have to grapple with new demographic challenges. So it's clear we will have to ask our healthcare professionals to deliver more for less.
This won't require a slash-and-burn approach. And it won't be about cuts to frontline staff and services. But it will require a fundamental shift in power between the state and the local NHS. We will need imagination and innovation to root out bureaucracy wherever we find it. And we must see a complete reverse of our declining productivity and poor health outcomes.
The NHS under Labour has been deluged with tick-boxes and targets. We will divert all the resources and energy spent on measuring processes to holding the NHS from top to bottom to account for patients' outcomes.
We have already identified significant efficiency savings that can be extracted from Labour's bureaucratic black hole and ploughed back into frontline services to achieve this. Getting rid of the A&E target that forces staff to treat patients as numbers, not people, could save around £400m a year. Scrapping plans to draft in more "outreach workers" for children's centres would free up £200m to hire 4,200 health visitors.