• The NHS ended the financial year 2015-16 with a deficit of £1.85 billion, the largest aggregate deficit in the history of the NHS

• It is clear that the scale of this deficit is not due to financial mismanagement but rather it is symptomatic of a system that is under strain with demand for services outstripping capacity

• The vote for Brexit has compounded this issue, as the fall in the value of sterling will only add to financial pressures as costs increase

"Politicians need to be honest with the public about what the NHS can offer with the funding allocated to it. It is no longer credible to argue that the NHS can continue to meet increasing demand for services, deliver current standards of care and stay within its budget. This is widely understood within the NHS and now needs to be debated with the public."

Responding to the report, Saffron Cordery, director of policy at NHS Providers, said: 

“This King’s Fund report reveals yet more evidence of the clear gap between the quality of care we all want the NHS to provide and the funding available. This is unsustainable and we cannot keep pretending this gap doesn’t exist and passing it onto NHS trusts. They know they need to strain every sinew but they are being asked to deliver the impossible and then find themselves chastised when they fall short. The situation is placing an increasingly intolerable burden on committed NHS staff, whose efforts are the lifeblood of the service. We need honesty and realism and an urgent public debate about where we go from here.  

“The King’s Fund report is the third piece of independent evidence in recent months that supports the view that systemic issues, not mismanagement, are causing NHS trusts to fall into deficit.  This systemic pressure, coupled with spiralling demand, rising costs and the growing deficits evidenced in this report, mean that trust directors are working flat out just to keep the service afloat. It is not a feasible strategy to just keep asking people to work even harder as finances are set to become even tighter in future.

“The impact of Brexit has only compounded this situation by adding an estimated extra £900 million to the costs of procuring medical devices from overseas due to the weakening pound. With the limited funding increases planned for the second half of this parliament, this situation is only going to get worse and we need to urgently address how the NHS can cope against such a tough financial backdrop.”