The NHS is facing a ‘defining year’ in which it may need to make even bigger efficiency savings than so-far planned to avoid rationing as it embarks on its latest round of reorganisation.

In his New Year message to doctors, Hamish Meldrum, chairman of BMA Council, said 2011 would be an “exceptionally testing time” for the health service, while Nigel Edwards, chief executive of the NHS Confederation, said it might be its most difficult year ever.

Their warnings were given additional impetus by the leak of a letter from the Independent Challenge Group set up to scrutinise Whitehall spending proposals in the run-up to the Budget.

The letter, leaked to the Guardian, warned that £20 billion of efficiency savings demanded through the Quality, Innovation, Productivity and Prevention agenda might not be achievable over the next four years and that the impact of transferring commissioning to GP consortia was likely to be “variable.”

If efficiencies are not made, the letter warned, there will be an “unpalatable trade-off” to be made between letting waiting times rise and increasing the health budget even further to cope with rising demand from the ageing population.

"We believe that the projected level of QIPP savings may not be achievable. We also have concerns about the costs of the switch from primary care trusts to GP commissioning; and the pace at which the associated benefits will be achieved; and about the impact on NHS costs of the planned cuts to the social care budget,” the letter said.

“The NHS typically deals with such shortfalls by limiting treatments, leading to increased waiting times. The government will be faced with a choice between dealing with the fallout from increased waiting times or increasing the Department of Health budget, perhaps by as much as £10 billion a year.

“To avoid this unpalatable trade-off, the DH settlement needs to build in much greater non-QIPP efficiency savings from the outset."

In response to the leak, the DH told the Guardian that the issues raised in the letter had been addressed during the spending review and in its response to the consultation on the NHS white paper.

The Operating Framework for the NHS in England 2011-12, which was released just before Christmas, outlined a number of measures to enable the DH and strategic health authorities to take tighter control of NHS finances and performance and to trim spending.

For example, it widened the focus of management cost savings, saying that “NHS super-structure running costs must be cut by a third – or £1.7 billion – by March 2015 – and outlined plans for an immediate cut in the NHS tariff of 1.5%.

Against this backdrop, Dr Meldrum criticised health secretary Andrew Lansley’s determination to press ahead “at break-neck speed” with an NHS reorganisation that will see SHAs and PCTs abolished, most commissioning passed to GPs, and all trusts pushed into foundation status.

“The government’s response to its consultation on the white paper, ‘Liberating the NHS’, was a missed opportunity to demonstrate to the profession, and others, that it genuinely was listening to the concerns that many had put forward,” he said in his New Year message.

“In particular, the lack of detail in many areas, the increasing emphasis on competition and the market, and the significant risks created by the process of rushed and unnecessarily risky transition, particularly at a time of such financial stringency.”

Nigel Edwards, chief executive of the NHS Confederation, urged policy makers to get to grips with the reforms.

"The mechanics of who does what to whom and who oversees it is done correctly will be central to making the new system work. It needs to be crystal clear but it remains a grey area and is therefore one of the biggest risks to the reforms working,” he told the Press Association.

"Parliament will also have to grapple with the issue of whether the reforms are powerful enough to achieve their goals.

"However, it is the transition that is causing greatest anxiety to the NHS and we have to get there first. That will mean avoiding hazards such as financial problems and failings in patient care."

2011 is also likely to be a difficult year for NHS IT. Experts and analysts interviewed by eHealth Insider warned that trusts would have to prove a rapid return on investment for any spending they wanted to make.