The NHS faces a £15 billion funding shortfall as it battles its biggest financial challenge yet, according to a report.
The NHS Confederation described the next two years as “tough but manageable”.
However, the body, which represents 90% of all NHS organisations, warned that “the position beyond 2010/11 is very different and extremely challenging”.
It predicted the problems caused by the recession and rising costs in a report called Dealing with the downturn: The greatest ever leadership challenge for the NHS?.
The study said: “With little or no cash increase, from 2011/12 the NHS will need to plan for real-terms funding to fall by 2.5-3% per annum.”
The NHS budget in 2009/10 stands at £102.7 billion – a 7.5% real terms increase on the previous year, according to the Department of Health.
Next year, the budget will be £105.8 billion, which it said was a 1.6% increase in real terms.
NHS Confederation chief executive Steve Barnett said: “With little or no cash increase from 2011/12 the NHS has to prepare itself for real-terms reductions in what it can afford to do and needs to make the hard decisions about which programmes to fund, how to reward staff and how to reorganise services now.”
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