Dr Eleanor Roy, Policy Manager Health and Integration
Clearly, the NHS was a winner in the Autumn Budget. To those in other areas of the public sector, £21bn revenue and £3.1bn capital over two years must seem like a jackpot deal.
The NHS is in the most challenging financial position ever, so any funding injection is extremely welcome. While the revenue funding seems generous, it has a lot of work to do. It will have to cover pay awards agreed earlier this year, increasing demand for (and costs of) delivering services, recovering performance against key targets and existing financial pressures, with the forecast system deficit for this year standing at £2.2bn.
What is unclear is the impact of the increase in employer’s national insurance contributions - likely to be substantial for the NHS, as it employs well over 1 million staff. We understand that there is £5bn set aside to compensate public sector employers for this, but how and when this will be allocated across government remains to be seen.
Turning to capital, the increase of £3.1billion over two years is incredibly welcome, given the historic levels of under investment in the health service. Much of this is already earmarked for specific purposes such as surgical hubs, diagnostics and increasing hospital beds, so it’s unclear whether there will be much scope for local priorities. The £1bn towards backlog maintenance is a positive, if slow, start to addressing the £13.8bn required.
More importantly, it is unclear when it will be allocated. With an additional £1.3bn for this financial year, and the need to spend it in-year, ensuring this is used to best effect is going to be challenging, as highlighted in our recent work on the NHS estate.
Wider public services have a tremendous impact on health and wellbeing, and on the NHS itself. As the NAO recognised, ‘the NHS’s future financial sustainability will be significantly affected by what happens in other parts of government.’ With only £600m additional funding for social care, and a resounding silence on the public health grant, this was a missed opportunity to consider the broader picture, the impact these services have on the NHS, and to begin the shift from treatment to prevention.
Overall this budget indicates a positive start to improving the financial stability of the NHS, with the average real terms increase moving closer to the long-term average for the first time in a decade. Although the front-loading over the next two years, with indications of slower growth in future years is a potential concern for the long-term.
Yet even with this seemingly generous budget, considering all the asks this funding has to meet, it is unlikely that it will be enough to deliver on the PM’s statement that ‘change must be felt’, and make a difference that patients will actually notice.
All eyes now turn to Spring for phase 2 of the spending review and the NHS 10-year plan, to see how the NHS will be enabled to deliver the transformation required and make the 3 shifts of analogue to digital, hospital to community and treatment to prevention.
As part of this, we urge the government look beyond the quantum of funding. Developing a clear diagnosis of the financial position of the NHS, the underlying issues affecting its resilience, and the finance regime in which it operates, would be a good foundation from which to consider wider reform to ensure our NHS is fit for the future.