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The coalition government will leave office with health services under significant strain and a real risk that patient care will suffer as the NHS heads towards a deficit, according to a major assessment of the NHS under the coalition published by The King's Fund.

The report is the second in a two-part assessment of the coalition’s record on the NHS, the first part of which looked at the government’s reforms, concluding that the upheaval caused by the Health and Social Care Act was damaging and distracting. This new report assesses NHS performance under the coalition, finding that it held up well for the first three years of the parliament but has now deteriorated, with waiting times at their highest levels for a number of years and several key targets missed.

The report finds that the coalition has met its pledge to increase the NHS budget in real terms, with funding increasing by an average of 0.8 per cent a year in real terms over the parliament. Key findings include:

• the numbers of doctors and nurses have increased, while management costs have been significantly reduced (1)
• patient experience remains positive, while public satisfaction with the NHS is at its second highest level ever (2)
• the number of health-care acquired infections has fallen, with cases of MRSA and C difficile at historically low levels (3).

However, with hospitals and other providers of care now overspending their budgets by more than £800 million, the report concludes that the NHS is likely to record a substantial deficit in the final year under the coalition. It finds that all areas of NHS care are feeling the strain, with general practice under huge pressure and concerns being raised about access to mental health services for vulnerable patients. Other findings include:

• target waiting times for A&E, hospital treatment and cancer treatment have all been missed towards the end of the parliament (4)
• hospital bed occupancy has increased to very high levels and delayed discharges have risen significantly over the past 12 months (5)
• there are signs that NHS staff are under significant pressure and morale is an increasing cause for concern (6).

The report also finds that the NHS has made some progress in improving efficiency, but that it cannot continue to rely on limiting staff salary increases, reducing the prices paid to hospitals for treatment and cutting management costs to deliver savings. Looking ahead, it signals that, while further efficiencies can be found, additional funding of £8 billion a year by 2020 is the minimum requirement for the NHS to continue to meet patient needs and maintain standards of care.

John Appleby, Chief Economist at The King’s Fund and the lead author of the report, said: ‘The next government will inherit a health service that has run out of money and is operating at the very edge of its limits. While the NHS has performed well in the face of huge challenges, there is now a real risk that patient care will deteriorate as service and financial pressures become overwhelming.

‘More optimistically, with the economy recovering, there could soon be an opportunity to think about public spending choices and the kind of health services we want in a fresh light. Future debate about the NHS should focus not on how parsimonious we need to be but on how generous we want to be.’