This year will be tough but in 2015/16 the NHS will be "really up against" financially, health minister Lord Howe told delegates at NICE's annual conference this week.

His comments mirror a warning by The King's Fund earlier this month that a financial crisis is now inevitable with damaging consequences for patient care.

This, it says, is being exacerbated by the introduction of the Better Care Fund next year, which will see at least £1.8 billion diverted from the budgets to support joint health and social care working, as well as the fact that the 'easy pickings' of savings - such as salary and management cuts - have been reaped.

Nevertheless, Howe insists that the financial dire straits is, in many ways, a good thing.

"It forces us to look at waste and unnecessary expense in the system, areas where quality and safety can go hand in hand with cost effectiveness," he said.

He noted that a hospital in America which health secretary Jeremy Hunt recently visited had managed to improve its safety record "out of all recognition" in just a few years, while their costs are 60% below those of their nearest rivals.

"It shows what you can do by driving costs down in the system and improving care," he said.

Health priorities

Elsewhere, Howe again outlined the government's health priorities, noting that NICE, which "continues to break new ground", is closely aligned with each of them.

A key aim, he said, is for England to have among the lowest avoidable deaths in Europe, which needs better prevention, diagnosis and treatment, all of which NICE can help with, particularly through its programme of public health guidance and quality standards.

Also, he reiterated plans to instil a culture of compassion throughout the health service, become the best in Europe in ensuring that dementia patients receive a timely diagnosis, improve the care of vulnerable older people, and bring the technology revolution into healthcare.