The Big Question: Why are we closing hospitals when spending on the NHS is rising?

Why are we asking this now?

Patricia Hewitt, the Secretary of State for Health, vowed yesterday to press on with health service reform saying it was the only way to safeguard the NHS's future. Reform meant "re-shaping" services and bringing in the private sector as a stimulus to innovation.

Does this mean closures?

Yes. Taking accident and emergency as one example, she said it was no longer safe to carry out all types of specialist emergency medicine in every single hospital. That means some A&E units will have to close.

Asked if this meant the end of district general hospitals she replied: "No, this is not the end of local hospitals, it's a change to local hospitals."

Is improving safety the only reason?

No. The NHS needs to save more than £1bn this year, more than 1 per cent of its budget. Last year (2005-06) it overspent by £536m, but in addition it had an accumulated deficit from previous years of £598m. The NAO warned that some trusts had such large deficits there was a question mark over whether they could remain "going concerns".

The biggest overspends are in London and the South-east. Trusts that have successfully concealed mounting deficits for years have found themselves exposed by a combination of tighter accounting rules and government reforms promoting increased patient choice and more competition between hospitals. As these reforms take hold the problems are likely to worsen. Surrey and Sussex, Hertfordshire and Avon and Gloucester are among the areas where managers consider there are too many hospitals.

Why the cuts when NHS spending has been rising?

Although the vast extra sums that have gone into the NHS have reduced waiting lists and improved services, the NHS has not increased its productivity. Instead of doing things differently, it has done more of the same. Ministers are determined to change that "For all the extra money, all the extra staff and extra patients treated, NHS productivity has remained almost unmoved," Ms Hewitt said yesterday. "If we are to match people's rising expectations... the NHS needs to become not just a bit more efficient, but dramatically more efficient and effective."

Is Patricia Hewitt alone in this view?

Far from it. David Nicholson, the new chief executive of the NHS who has spent 25 years in the health service said in an interview earlier this month that there would be up to 60 "reconfigurations", concentrating key services in fewer hospitals. He named A&E departments, paediatrics and maternity services as areas where provision would have to be rethought.

What do the doctors think?

Mr Nicholson stressed that the NHS had to win the support of doctors and explain the advantages of reform to the public if the reforms were to succeed. But he had done his homework. In June 2002, the Royal Colleges of Physicians and Surgeons published a joint survey which found 59 hospitals (surprisingly close to the 60 Mr Nicholson cited) were too small to sustain the range of services provided. It said these hospitals should effectively be downgraded to provide intermediate care leaving seriously ill patients to be treated in bigger hospitals.

Haven't we been here before?

We have. There was a wave of hospital closures in the 1970s and 1980s, driven as now by a combination of financial constraints and advances in technology. Medical care has changed, patients stay in hospital for one or two days on average instead of five or six days a generation ago and the number of hospital beds - and hospitals - has fallen accordingly, as the graph shows.

Now we are facing a second wave of closures, as high-tech medical care is concentrated in fewer "palaces of disease", offering the full panoply of specialisms with 24 hour consultant-led cover - but leaving patients further to travel.

But patients want care close to home

Indeed, as politicians have learnt to their cost. You only have to utter the word "Kidderminster" and MPs of all parties freeze. Labour lost a parliamentary seat at the 2001 election when Richard Taylor stood as an Independent protesting about the closure of the A&E department at Kidderminster hospital. Dr Taylor won again in 2006.

Doctors argue it is impossible to provide the highest quality medical care in the modern age in every local community. The trade-off is between local access and quality of care.

Didn't Ms Hewitt reprieve cottage hospitals in January?

She did - ordering a moratorium on closures for financial reasons and promising a new generation of up to 50 cottage hospitals would be built.

But this is not as paradoxical as it seems. Cottage hospitals and primary-care clinics offer low-cost care on people's doorsteps. The high-tech hospitals (formed by reconfiguring existing district general hospitals) will provide the highest quality back-up care for those who are seriously ill.

The boundaries between the two are blurring as more care is being provided in the community, with consultants holding outpatient clinics in GP surgeries.

Ms Hewitt said last January at the launch of a White Paper on care outside hospital that she wanted 5 per cent of resources to be shifted from hospitals to GPs over the next 10 years. But this will add to the pressure on hospitals already overspent.

Will the closures happen?

This is the $64,000 question. Politicians have promised to "re-structure" the NHS for decades but backed off in the face of sustained local opposition. The new financial regime in the NHS means there is nowhere any longer for overspending trusts to hide their deficits.

The message to their managements is: reform or go. The tough talking from the Secretary of State for Health and the head of the NHS suggest they mean business - but it ain't over till the Pat lady sings.

Should hospitals close?

Yes...

* Modern medical care of the highest standard can only be provided from fewer, bigger hospitals

* There are too many hospitals in some parts of the country and too few in others

* Hospitals facing the biggest overspends must be reconfigured to improve their efficiency

No...

* What patients want is a good local hospital close to their homes not a super hospital that can only be reached by car

* Politicians have promised to re-organise local health services before - but backed off in the face of local opposition

* People suspect closures are to make short-term financial savings, not long-term improvements to the NHS