IMHO, just more smoke and mirrors really. As has been said, ring-fencing makes no difference when only applied to part of the funding arrangements because they can just 'adjust' outside the fence to suit ideology and other factors.
There's two fundamental funding approaches for the public sector incl. NHS:
- Top down - allocate a chunk of the expected tax revenue and see how far it goes - 'cut cloth accordingly' on service delivery
- Bottom up - define a required service level criteria for each healthcare area, cost-load it and see how much total funding is required to be provided
Unfortunately, we have a bad blend of both, all dealt with in a politically charged environment. Free at the point of delivery creates an ignorant public with no idea of the costs involved who just expect infinite bottom-up service provision. This is pitted against politicians who want to manage the total amount in a way that wins and keeps votes.
Neither deals well with the reality and risks of providing the service, especially bearing in mind how medical science has progressed and population has grown/changed over the years. We'll only start making progress when everyone accepts that there is a limit on service. We can then talk sensibly and more empirically about where the limit should be and what compromises that means in other areas.
At the minute, both public and politicians' expectations on service are often unrealistic - they don't accept (public) or admit (politicians) that however much NHS funding we provide, it will still run out at some point. So NHS will always be susceptible to being characterised by some as "struggling".
The issues are further obscured by the challenges of having to deal with variable, unpredictable demand. To illustrate the flip side of the coin: Who wants to pay for empty hospitals with doctors/nurses/treatments on the payroll excess to requirements but there 'just in case'? And then, of course, we need to weave in the debate about organisational efficiency, productivity and waste - should that be first or later?
This isn't necessarily a public vs private thing either. Balancing the books applies to both - public/private just changes the order of priority for pulling the control levers, especially relevant if the risk due to uncertainty hasn't been pre-allocated clearly and well.