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NHS Confederation boss Mike Farrar warns of hits to jobs, A&E and maternity wards to stave off going bust The NHS’s cash crisis is so great that it will have to either cut services to patients or close accident and emergency and maternity units if it is to avoid going bust, ministers have been warned. Resolving the service’s deepening financial worries will involve decisions that will be politically unpalatable as any efforts to save money will arouse controversy, according to a senior NHS leader. Mike Farrar, chief executive of the NHS Confederation, writes in the Guardian that longer waiting times and worsening balance sheets at foundation trust hospitals show that the NHS is facing an “unprecedented financial challenge” that has not yet been widely recognised. The need to make £20bn of efficiency savings by 2015 “means our finances are under more strain than ever”, he says. “I am deeply concerned that the gravity of this problem for the NHS is not widely understood by patients and the public. There is a real risk we will sleepwalk into a financial crisis that patients will feel the full force of. “This could see the NHS forced to salami-slice its way out of financial trouble, cutting services and use of less effective treatments,” adds Farrar, whose organisation represents most NHS hospitals, primary care trusts, ambulance services and mental health trusts in England. “There are three scenarios,” he adds. “The NHS maintains service standards but goes bust while doing so; it sees standards slip but maintains financial balance; or it keeps improving and stays in the black. Clearly, we all want the third option.” His intervention comes days after the health secretary, Andrew Lansley, warned that 22 trusts, which between them run 60 hospitals, were on “the brink of financial collapse” because of punishing repayments under private finance initiative deals struck while Labour was in power. Farrar says remaining solvent while preserving quality of patient care “means radically re-orienting services to reduce hospital stays and offering new forms of care. Put bluntly, this means fewer beds and fewerhospital-based jobs.” Closing some hospital units as part of a drive to centralise key medical services will both drive up standards and save money, he argues. The health minister, Paul Burstow, last week admitted that a “wave” of decisions involving reconfiguring hospital services across England was imminent. Some will be agreed by local NHS bodies, though others may go to the Independent Reconfiguration Panel of advisers, with Lansley having the final say. A source close to Lansley said he would not shy away from hard decisions, including on reconfigurations. “Mike Farrar is right to highlight the challenges the NHS faces, after a decade of declining productivity and many years of Labour turning a blind eye to the problems some parts of the NHS have been facing,” the source said. “Tough solutions may be needed, but through our modernisation plans we will help the NHS overcome these challenges so that every part of the NHS delivers the best possible care to patients.” Dr Mark Porter, chairman of the British Medical Association’s consultants committee, said the NHS’s cash problems had been forced on it by ministers despite its best-ever performance. “The NHS is working better than ever: more and better treatments, highly regarded by most patients,” he said. “The financial crisis has been imposed by governments with the continual claim that money needs to be removed to be spent on different treatments. Porter said: “It’s time that the people started asking where this pile of money is and what it is being spent on. “Right now, the government appears to want both a financial crisis and also to spend billions of pounds on completely unnecessary structural reorganisations.” Dr Clare Gerada, chair of the Royal College of GPs, said the NHS was facing “the chaos of change associated with an unprecedented need to make cuts. “What is actually happening is that the public are being told that everything is OK, and that they can have choice and that we can have lovely new hospitals and it will be business as usual. This needs to stop.” Hospitals cannot be shut safely without causing harm to patients, she added. “Many hospitals have told me that they don’t have enough beds, and this is especially apparent during the winter months. “Hospitals run at very high bed occupancy already and shutting them piecemeal does not appear to make much sense, except as cost reduction,” said Gerada. NHS Health Health policy Liberal-Conservative coalition Denis Campbell guardian.co.uk