Leaked letter outlining plans to cut costs of clinical trials only one of number of drastic measures under consideration that could damage research   Health Secretary to be asked to clarify policy on medical research following U-turn

Labour is calling on Jeremy Hunt to make an urgent statement on the state of NHS finances - and Government policy on medical research - following a dramatic u-turn from NHS England on plans to cut funding for experimental drugs and clinical trials.

Last week, hospitals received a letter (attached) from NHS England saying that, under a new national policy, the excess costs of funding treatment linked to clinical trials would no longer be met across England because of the “current financial climate” in the NHS.

If adopted, the move would have affected thousands of very poorly patients and had a devastating effect on UK medical research.   The letter, obtained by Labour, was in direct breach of the NHS Mandate. It was withdrawn late yesterday by NHS England and described as “inaccurate”.   But it is not the only measure under consideration that could damage specialist care.   Other drastic measures include cuts to tariff funding for specialist teaching hospitals that, experts say, would have an even more damaging impact on specialist treatment and research than the now-abandoned plans on clinical trials.   Teaching hospitals were informed late this week that the NHS is planning to pay only 50 per cent of the costs for care of the most vulnerable patients with complex and rare conditions, including cancer treatment, above the expected levels. They have warned that this would create a perverse incentive to refuse referrals from around the country to avoid losing money for every patient treated.   The move would take over £1.2 billion from frontline NHS budgets in 2015/16, according to the Foundation Trust Network, who warn that “an NHS cash crisis now feels inevitable next year”.

News of the cost-cutting measures being considered comes as NHS England fights a growing deficit and the NHS overall is predicted to be deficit this year for the first time in almost a decade. Figures published in recent days by the King’s Fund show that, halfway through the financial year, hospital trusts are in deficit by £630 million.

Andy Burnham MP, Labour’s Shadow Health Secretary, said:   “The fact that this letter was even sent at all reveals the urgency of the growing financial crisis in the NHS. And the manner in which it was withdrawn, late on a Friday evening, suggests that decision-making at the top of the NHS is in a growing state of chaos.   "It will raise fears that Jeremy Hunt and NHS England have lost control of NHS finances and are now looking at a series of drastic cuts to balance the books.   "It is simply not acceptable that measures of this kind, that could have devastating consequences for thousands of patients, are being cooked up behind closed doors.   "Jeremy Hunt must come to the Commons next week and explain how this letter came to be sent. He must come clean about the true scale  of the financial crisis in the NHS and what other measures are under consideration to plug the growing hole in NHS finances.