The Spring Budget was not all too bad, as it brought temporary respite for the NHS. Britain’s healthcare system has been operating under dire circumstances with overburdened staff, rising demand and record waiting lists.
While the additional capital injection dominated the public narrative yesterday, CIPFA suggests the reality may not as bright as it seems.
The announcement that the ‘NHS productivity plan’ will be fully funded with £3.4bn is welcome, even though it is somewhat puzzling. While there has been a digital plan and programme, neither of these seem to fit the bill. Even though NHS England intends to set out how the funding will be used and how it will impact productivity later in the year, the absence of an actual plan is concerning. Especially, given the challenging 1.9% annual productivity growth that NHS England has agreed to. It is also true that similar commitments and funding for technology have been made before, but when pressures mount these funds are among the first to be diverted to plug the gap.
The allocation itself is difficult to pin down. The budget document speaks of £3.4bn of additional funding over three years. However, as this falls in the next spending review period, it’s difficult to identify a baseline against which this is ‘additional’. The detailed table in the budget document (Table 5.1) shows allocations over the three years from 2025/26 to 2027/28, but these total £2.6bn, leaving a mysterious £800m presumably to be allocated at some point in the future? CIPFA worries such uncertainty does nothing to promote good public financial management and the ability to set robust financial plans.
Turning to day-to-day spend, the £2.5bn extra revenue funding for 2024/25 is welcome but it’s unlikely to be the end of the story. It may cover the cost of the pay awards previously agreed but will not stretch to fund the government’s NHS workforce plan, nor make any meaningful impact on long waiting times for patients. Given an additional £3.8bn last-minute injection for the current year, it is highly likely that further in-year funding will be required again next year – particularly if industrial action continues.
Dr Eleanor Roy, CIPFA’s Health and Integration Policy Manager said:
“Unfortunately, yesterday’s budget was another step in the well-worn cycle of crisis-cash-repeat. It was silent on the long-term investments which are badly needed to ensure the
resilience and sustainability of our NHS. There was no attempt to address the issue of the crumbling NHS estate as highlighted in CIPFA/ Institute for Government Performance Tracker released last year. In addition, there wasn’t any support for those wider public services on which our health depends. “
Productivity gains are all well and good, but at their core they measure inputs and outputs, not value for money or the actual outcomes which impact on population health. A broader view of investing in health as an asset, which in turn contributes to wider economic growth and resilience of our communities, is long-overdue. This cycle of short-term firefighting needs to be broken and replaced by long-term settlements.
Notes to editor
1. NHS Productivity Allocations- Table 5.1 in the Spring Budget on gov.uk totals only £2.6bn which leaves £800m unallocated. Read the budget document here.
2. NHS Digital Plan and Productivity Programme
3.The CIPFA/Institute for Government Performance Tracker is a data-driven analysis of performance and spending across nine vital public services. The 2023 edition highlighted that historic underinvestment in capital and the crumbling NHS estate is hindering hospital productivity
About CIPFA
CIPFA is a global professional body, operating at local, national and international level. As a global leader in public financial management and governance, our aim is to make a difference to the world we live in.
Our work enables people to prosper, protects the vulnerable and helps sustain the environment for future generations. We’re committed to changing lives for the better. By setting standards, leading on policy debate and advising public bodies and governments we help ensure the money and resources used on behalf of citizens are raised and spent fairly, transparently, efficiently and free from fraud and corruption. Our goal is to always make it count.