A fundamental review of the NHS is needed to address a financial crisis, Lord Kerslake said, after quitting as the boss of a major hospital trust in protest at funding problems.

The former head of the civil service, who resigned as chairman of King’s College Hospital NHS Foundation Trust in London on Sunday, said the health service could not continue “staggering along” under the current funding levels.

He said a “proper review”, potentially on a cross-party basis, was required to address the future of the NHS – and how to pay for it.

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NHS Improvement branded the trust’s financial performance “unacceptable” but Lord Kerslake insisted that savings had been made.

He told BBC Radio 4’s Today programme there was “not enough understanding of the scale of the challenge that both King’s and the NHS is currently facing”.

Lord Kerslake said: “We face some here and now issues. I am deeply concerned about the position generally, actually, in London where most of the hospitals are struggling.

“But there is also a big issue about social care as well which got no additional funding in the Budget.

“And I think, deep down, what we need is a proper review, a cross-party review, I don’t mind what it’s called, that looks at what kind of NHS do we want, how much is it going to cost and then how are we going to pay for it.

“Unless we do that we are just going to carry on staggering along, kicking the can down the road and not really addressing the fundamental issue.”

(Andy Hepburn/PA)(Andy Hepburn/PA)

The crossbench peer, who has carried out some work for Labour, insisted that his decision to speak out was motivated by a “deep passion for the NHS” and was “nothing to do with party politics”.

A spokeswoman for NHS Improvement said the financial performance at King’s was “the worst in the NHS and continues to deteriorate”.

“We are considering a range of actions, including entry to our financial special measures regime, which means King’s will be subject to greater scrutiny and extra support from NHS Improvement.

“We respect Lord Kerslake’s decision to step down and will replace him with a highly experienced new chair to take charge of the trust’s position.”

Shadow health secretary Jonathan Ashworth said: “This is embarrassing for the Government and is evidence from a heavily respected figure on the frontline that the Budget utterly failed to deliver for the NHS and that seven years of underfunding is impacting on patients in unacceptable ways.”

A Department of Health spokeswoman said: “We know that King’s NHS Foundation Trust faces huge financial challenges and we will support them to tackle these issues and continue to deliver high quality care for patients under a new chairman.

“We would like to thank Lord Kerslake for his service.”