NHS funding should be cut to improve standards, says think tank

THE GOVERNMENT should stop ringfencing the healthcare budget if it wants to improve NHS standards, according to a report released today by the think tank Reform.

Its authors say much-needed modernisation of the NHS is being delayed because, unlike other public services, there are few reason to innovate as funding has been guaranteed during this parliament.

“At the moment if you are an NHS manager, there’s no incentive to deliver more for less because there’s no real terms funding pressure,” Reform’s Thomas Cawston told City A.M. “We need to move the debate away from the sense that the way to improve services is to spend more money on them.”

"We need to deal with the growth in demand, especially for long-term care. This is only going to happen when we create a stimulus."

Earlier this month home secretary Theresa May said recent spending cuts have prompted innovation in public services, citing success in the police and fire and rescue services.

But Reform faces a tough battle to convince politicians that the NHS ringfence should be dropped, with all three major parties supporting the status quo.

David Cameron made protection of the NHS budget a key part of his manifesto at the 2010 general election. He has already confirmed that the healthcare, schools and international aid budgets will be exempt from the next round of spending cuts, due to be announced next week.

The CBI, Lib Dem business secretary Vince Cable and right-wing Conservative MP Liam Fox have all stated their opposition to ringfenced budgets in recent months.