Health service leaders warn they will need almost double the £8bn boost promised by ministers because delivering target is ‘pie in the sky’

NHS leaders fear they will need almost double the £8bn boost ministers have pledged for the health service because the chances of delivering £22bn of promised savings are “pie in the sky”.

They believe it is unlikely more than £15bn of efficiencies can be achieved to help close the £30bn hole expected to appear in NHS finances by 2020.

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Senior figures at NHS England have told the Observer they expect the service to fall well short of its £22bn target, and that it will therefore need a further £7bn injection from the Treasury, on top of the £8bn, in order to maintain standards of care – £15bn in all.

They are bracing themselves for a bruising battle with ministers, who have told them not to expect any more than the £8bn and to urgently start making substantial savings.

“Our current working assumption is that we can make about £15bn of efficiency savings by 2020, maybe £16bn with a fair wind. There’s no way we’ll achieve the £22bn. That’s pie in the sky,” said one senior NHS official.

Another said: “Delivering the £22bn would involve unprecedented productivity gains. The £22bn was overly ambitious and not very realistic.”

Simon Stevens, the chief executive of NHS England, and Professor Sir Bruce Keogh, the service’s medical director, are among those who think £15bn is the most the NHS can realistically expect to save during this parliament through reducing waste, slashing spending on agency staff, holding down staff pay and caring for patients closer to their homes. Stevens has also told colleagues that the NHS’s financial black hole will become even bigger than £30bn – and leave it needing even more extra money than the further £7bn – if local council social care budgets are cut again, as that would put even more pressure on hospitals and GP surgeries.

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The Association of Directors of Adult Social Services has warned that social care budgets in England, which were cut under the coalition, will be cut by another £1bn this year.

In public, Stevens continues to accept the need for the service to pursue the £22bn target, but he was very disappointed that the recent government-commissioned review of NHS productivity and procurement by Lord Carter of Coles identified only £5bn of potential savings.

NHS leaders know any request for additional funding beyond the £8bn will be difficult for an administration that plans to keep cutting most other departments’ budgets. The mood among MPs and in Whitehall is hardening against giving the NHS any more than that. “Ministers feel they gave an extra £2bn last year and it made no difference; A&E targets are no better. And they have committed to the extra £8bn by 2020 that Simon Stevens said the NHS needed. They feel that it’s time to deliver, full stop,” said a senior NHS official who is privy to Treasury and Department of Health thinking.

Health secretary Jeremy Hunt is exasperated that NHS leaders may seek to revisit the agreed division of the £30bn. The Tories were boosted during the election campaign when the chancellor, George Osborne, unequivocally committed to provide the £8bn that Stevens had requested.

In a Daily Telegraph article last month, Hunt wrote that: “ Eight billion was what the NHS asked for. But with that commitment from taxpayers, the time for debating whether or not it is enough is over: the NHS now needs to deliver its side of the bargain, which is to make substantial and significant efficiency savings.”

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However, the government may yet have to find further extra money for the NHS for the seven-day service that David Cameron has pledged. Stevens has been telling Treasury and health ministers that the £8bn will not cover the extra costs involved.

Sources involved in NHS England’s preparation of the Five-Year Forward View – the blueprint for the service’s transformation by 2020 unveiled last autumn – have revealed how many of the senior figures involved, from a range of NHS bodies, believed ministers would need to provide between £12bn and £15bn to close the £30bn gap. As late as the morning of the document’s launch, Stevens, Keogh and David Bennett, chief executive of Monitor, the NHS’s economic regulator, were still debating whether to ask ministers for £8bn or £12bn. However, fears that anything over £8bn would prove hard to sell to the political parties proved crucial, officials say.

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Liberal Democrat MP Norman Lamb, who was a health minister until 7 May, said recently that the Forward View’s financial assumptions were “completely heroic” and the £22bn “virtually impossible” to achieve, “and everyone on the ground knows just how impossible it is”.

Professor Chris Ham, chief executive of the King’s Fund health thinktank, who briefly advised the coalition on NHS policy, said it was an open secret in the health policy world that the £8bn would not be enough. “There’s been no public debate about it. But in the circles in which I work it’s widely recognised that achieving the £22bn by 2020-21 is highly unlikely. If it doesn’t happen, the government will face a difficult choice – find more money for the NHS to maintain good standards of care, or insist that budgets are balanced and accept that that will have an adverse effect on patient care, with waiting lists and quality of care being compromised as a result of staffing levels being cut.”A government spokesman said: “The amount the NHS can deliver in efficiencies this parliament, and so the £8bn extra required to implement the Forward View, were both determined by NHS England – not the government. As both the health secretary and Simon Stevens have said, the service must now focus on transforming care to deliver savings.”

A spokesman for NHS England said: “The widely supported direction set out in the NHS Five-Year Forward View remains the right solution for healthcare in this country, and we are certainly not seeking to reopen the case that it made on funding and efficiency.”