NHS budgets are set to be slashed by £500million to help cover the cost of Covid testing.
Health chiefs say the Treasury has demanded eye-watering savings as the cost of the pandemic bites.
But they warn cost-cutting could mean more Brits get stuck on waiting lists if it slows down hospitals’ recovery.
Julian Kelly, chief financial officer for NHS England, told a board meeting: “We have been asked to see if we can cut core NHS funding – probably to the tune of about £500m.
“That would involve slowing down transformation programmes and re-phasing some of the long-term plan.”
The total NHS budget is around £136billion per year.
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Hospital bosses said the latest cut, for the 2022-23 financial year, will eat into funding boosts promised by the government.
They added the health service will suffer a double-whammy with inflation stripping another £1bn out of the purse next year.
NHS Test & Trace has been criticised for its immense £37bn budget but ministers say it was vital to controlling the pandemic.
Saffron Cordery, deputy chief of NHS Providers, said: “The NHS is being left to pick up the Covid bill against a backdrop of rising cases and hospital admissions.
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“A cut as substantial as £500m creates a very real risk of trade-offs, which could affect the ability to increase hospital activity and improve the quality of patient care.”
