The waiting list for NHS care in England could rise to 15 million people in the next four years without a significant increase in its current capacity, ministers are warned, amid a cabinet clash over the service’s future funding. With senior figures inside the health service warning there is currently “a chasm” between the NHS and the Treasury over the financial settlement now needed, exclusive analysis seen by the Observer shows that NHS trusts in England are on course to spend almost £5bn more next financial year than was anticipated when Theresa May set the service’s funding levels in 2018. The analysis by the Nuffield Trust finds that NHS trusts also face ending this financial year with an overspend of £5bn, excluding the extra costs of dealing with Covid. Insiders warn that billions more will have to be added to the NHS’s new financial settlement this autumn in the wake of continuing Covid-related costs, reduced capacity and staff shortages. Several sources said that a “conservative estimate” would see an extra £7bn a year needed on top of existing NHS funding. However, the battle over future funding, set to kick off between health secretary Sajid Javid, NHS England, and chancellor Rishi Sunak this summer will begin with the sides far apart. Ultimately, the prime minister is also expected to engage in the talks. Writing in today’s Observer, Chris Hopson, the chief executive of NHS Providers, warns the government that the package handed to NHS England at this autumn’s spending review will have a “significant impact on the next general election”. He said the last time the NHS had to deal with comparable waiting lists in the early 2000s, it was handed annual increases of 7% or more. “The chancellor has, up to now, largely met his pledge of giving the NHS what it needed to cope with Covid-19,” he writes. “But, recently, the Treasury mood music has sharply switched. To recovering the national finances, reducing the NHS share of public spending, and a worryingly misplaced assumption that Covid-19 costs will fall quickly, so the NHS can return to its ‘generous’ June 2018 settlement. Frontline leaders can’t provide the quality of care patients need, and deliver the government’s manifesto commitments, unless they are properly funded to do so.” Two issues are combining to cause severe problems for the health service’s budget. Millions of patients will be added to existing waiting lists as the Covid pandemic eases and they return to GPs. Meanwhile, Covid restrictions mean that the service was only running at 82% of its 2019 capacity by May this year. Javid warned last month that waiting lists could reach 13 million people before they begin to fall. However, new analysis by the Institute for Fiscal Studies (IFS) has found that the outlook could be even worse unless action is taken. If only two-thirds of the “missing” patients return, with the NHS remaining at 95% of its pre-pandemic capacity over the next few years, waiting lists would still rise to an enormous 11 million within a year and then continue to climb to more than 15 million by the end of 2025. The IFS found that even in its most optimistic scenario, the number of people waiting for treatment would rise to over nine million next year and would only return to pre-pandemic levels in 2025. Max Warner, a research economist at the IFS and an author of the analysis, said: “More than four million people were on an NHS waiting list even before the pandemic. Covid-19 has only made matters worse, as millions of people have missed out on treatment and millions more haven’t even been referred on to the waiting list to begin with. There is a real risk that if the NHS cannot find effective ways to boost its capacity – a challenge at the best of times, let alone after a major pandemic – then much longer waiting lists will be with us for years to come.” A Department of Health and Social Care spokesperson said huge amounts had already been given to the health service during the crisis, on top of its previous settlement. They said: “We are committed to making sure the NHS has everything it needs to continue providing excellent care to the public as we tackle the backlogs that have built up during the pandemic. This year alone we have already provided a further £29bn to support health and care services, including an extra £1bn to tackle the backlog. This is on top of our historic settlement for the NHS in 2018, which will see its budget rise by £33.9bn by 2023-24.”