NHS reform :  getting back on track.

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Despite the rapid growth of funding, in 2005/6 NHS trusts in aggregate overspent by more than £1.2 billion, and the NHS as a whole overspent by more than £500 million. More than 60 trusts incurred significant deficits, and turnaround teams were sent in to find out why. Although until recently a key argument for higher NHS spending was a shortage of capacity in the NHS, the press is now full of stories about staff reductions and ward closures. The NHS Confederation warns that the next two years will be 'the most challenging we have ever had to face'. The NHS is widely regarded as being in financial crisis. There is a widespread sense that system transformation is on hold while trusts struggle to maintain or restore short-term financial balance. So, how did we reach this position, and what can be done about it? These are the questions that this paper sets out to answer, focusing on three areas : why is the NHS in financial crisis; how is the NHS likely to respond to recent policy developments; how can the reforms get back on track? [Introduction]

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