Following yesterday’s Autumn Statement by Chancellor George Osbourne, we present our thoughts on how this impacts on the health and social care sectors.
Health
Additional resources for health are welcomed, particularly against the backdrop of wider expenditure reductions. However, the headline of £6bn extra investment in the NHS isn’t quite the straightforward good news it sounds, as:
- £2bn is already factored into the 2015/16 resourcing, which is set to overspend
- It seems that there are several calls on the extra £4bn compared with 2015/16 budgets:
- rectifying any underlying overspending in the 2015-16 position
- £0.6bn new commitment to mental health spending
- costs associated with moves to seven day working, which is a commitment which was made after Simon Stevens’ £30bn assessment (and has been assessed as costing up to £3bn per year long term)
- any shortfall between the five year expectation of new spending pressures (£30bn) and savings plans (£22bn), i.e. £1.6bn even assuming no ‘frontloading’ of the £8bn.
As set out in The Health of Health Finances, CIPFA believes that the overall level of pressure in the health system was underestimated, and the ability to achieve savings overestimated leading to an overall gap greater than £8bn. For example, cost pressures include an estimated £1bn additional annual pension costs from 2016/17.
Social care
It is also possible (though not yet clear) that NHS budgets will be diverted to fund the £1.5bn increase in the Better Care Fund promised by 2021. On balance, then, it seems unlikely that the £6bn does allow significantly for frontloading to enable investments to be made up front to generate later benefits.
Further assessment is also required of:
- whether the extra 2% council tax option to support social care will provide sufficient protection in deprived areas with a low council tax base
- the effects of the new arrangements for nursing training, places are currently oversubscribed but it remains to be seen how the level of demand for places responds to the new funding arrangements
- how, given the structural split between commissioners and providers, a sensible approach will be taken to tariff and efficiency setting if the problems currently being experienced by providers stand any chance of being stabilised.