The NHS will suffer the most severe and lasting funding cuts in its history between 2011 and 2014, according to a forthcoming report by the NHS Confederation.

NHS Confederation managers have warned of an "extremely challenging" financial outlook, while the report concludes that the health service will not survive in its current form.

The report indicates that the NHS in England will face a cut of between £8bn and £10bn throughout the three-year period.

This prospect has been visible since the Budget in late April, when a report by the British Medical Journal stated that in 2010-1 the NHS would need to contribute £2.3bn of the £5bn of public sector efficiency savings being sought that year. The BMJ commented: "The 2009 budget signals the beginning of a sustained period of disinvestment in the NHS, a mirror image of Tony Blair's commitment in 2000 to increase healthcare spending to bring it in line with the European Union average."

The Healthcare Commission report demonstrates the truth of this prediction. However, the BMJ also pointed to the potential for savings in a number of current changes in the NHS, including better procurement systems, improved use of IT and a sharper focus on value for money. The use of community healthcare to reduce demand for expensive hospital services is a major aspect of this strategy.

While the medtech industry will be concerned at the challenge of taking forward the newly-developed innovation agenda in these austere conditions, it is equally clear that using new technology to reduce costs and improve outcomes will be essential to the future of the NHS.