NHS leaders have been urged to "get the public on board" as they confront the challenges of tackling flat budgets while managing the increased costs of an ageing population, advanced technology and the growing rates of lifestyle diseases such as obesity.

Tackling these challenges will require radical action, with further integration of services and expanding community-based care, says David Stout, deputy chief executive of the NHS Confederation.

"This is necessary to avoid financial pressures harming patient care and to ensure the NHS keeps up with the needs of local populations," he said. "We need to get communities fully involved in discussions about how we shape services," and NHS leaders must "persuade people that we need to change services to improve the quality of patient care and make the most of the resources we have."

Mr Stout was responding to the review by the independent regulator Monitor of the NHS Foundation Trust sector's annual plans for 2012/13. The review, which looked at the plans of the 144 NHS Foundation Trusts authorised prior to April 1, 2012, finds that the sector still faces challenges in meeting greater demand and more stretching health care targets while delivering significant savings each year.

"In the short term, the sector's balance sheet is in good shape overall, and Trusts have planned sufficient cost savings in the year ahead," said Stephen Hay, Monitor's chief operating officer.

"However, Monitor's review suggests that an increasing number of individual Trusts will face financial difficulties by the end of this period, with different issues affecting different Trusts." he went on.

"Our experience of reviewing these plans tells us there are indications that the sector's finances will be weaker by the end of 2015. We expect an increasing number of Trusts could be placed in significant breach for financial reasons," Mr Hay warned.

While the review finds no single issue affecting Trusts' resilience, the challenges include; - pressures in the local health economy; - specific cost structures, such as large or expensive private finance initiative (PFI) schemes; and - questions about the sustainability of the District General Hospital model, if it remains unchanged.

Mr Stout of the NHS Confederation agreed that while NHS leaders are expressing some confidence in meeting the immediate financial challenge, pressures are continuing to growth across the Service, with increasing numbers of organisations starting to experience significant financial pressures.

"Local NHS organisations, with political support, need to be clear that it is possible to change the way staff work and where services are offered, so patients get better care and the public gets value for money," he said, and added: "no change is not in the best interests of patients."