Keir Starmer may have rattled a few Tory cages when he ordered a portrait of former Tory PM Margaret Thatcher to be moved out of sight in Downing Street, but it’s Thatcher’s policies and neoliberal approach that most need to be dumped if Labour is to rescue the NHS.
The latter part of the summer has seen Starmer and Chancellor Rachel Reeves laying on the gloom, talking incessantly about the ‘black hole’ in the public finances and warning that, despite all the promises of ‘change,’ and Labour’s thumping 170-plus majority that means they could do anything they like, things can only get worse.
Against this defeatist backdrop any hope of building new hospitals – or repairing the old ones that are crumbling for lack of maintenance – has already been ruled out, and the Adult Social Care Training and Development Fund has been scrapped.
Now there have been warning after warning from the NHS that even Labour’s limited manifesto promises – to reduce the waiting lists and restore performance on the 18-week target by the end of this parliament, “bring back the family doctor”, and fix what health secretary Wes Streeting has branded a “broken” NHS – cannot be fulfilled if there’s no extra money in the pot.
The NHS Confederation’s CEO Matthew Taylor has urged Ms Reeves to take early steps address the mounting financial crisis in the NHS ahead of winter: if not, NHS leaders will have difficult decisions to make, including cuts in staffing and services to balance the books.
A decision to stick to the current funding level while the health service continues to face record demand for emergency care, elective care and mental health services, would mean Labour’s only “change” would be to become even meaner than the Tories have been:
“With a revenue settlement for this year that was almost flat in real terms we have no doubt that had the Conservative Government been re-elected they would have had to inject more money ahead of winter, as they had to on several other occasions,” said Matthew Taylor.
He added:
“Winter will be the first big test for the new government’s management of the health service. Far better for the government to get ahead of what’s inevitable by giving the NHS the funding certainty it needs going into winter so that posts can be saved and extra capacity be lined up. In the past, we have seen governments come to this conclusion and provide extra funding but too late in the year for it to have an impact. The new government must avoid that this year.”
In a recent survey, nearly nine in 10 local health system leaders (87 per cent) told the NHS Confederation they would not be able to meet their ambitions within their current budgets.
NHS Providers CEO Sir Julian Hartley has also spoken up, rather timidly arguing that:
“If political pledges are to become a reality, national NHS leaders need to work with provider trusts and system partners to provide a clear set of priorities and equip them with the right level of funding and staffing…”
A National Audit Office report published in mid July also spells out the stark choice before Labour. It notes the problem they have inherited from 14 years of under-funding:
“NHS England and NHS systems have prioritised trying to live within their allocated funding. But, despite great in-year efforts to do so – some of which privilege the short term at the expense of the long term – an increasing number of NHS bodies have been unable to break even.
“When we consider how the health needs of the population look set to increase, we are concerned that the NHS may be working at the limits of a system which might break before it is again able to provide patients with care that meets standards for timeliness and accessibility.”
However the NAO points to “the potential growing mismatch between demand for NHS services and the funding the NHS will receive,” and warns that the NHS may indeed get worse still unless there is a change of course:
“Either much future demand for healthcare must be avoided, or the NHS will need a great deal more funding, or service levels will continue to be unacceptable and may even deteriorate further.”
The NAO report explains that the current crunch has come from real terms cuts in funding last year and in 2024/25: NHSE’s resource expenditure was £155.1 billion in 2022-23, and it expects to have spent a total of £153.2 billion in 2023-24, a real-terms year-on-year reduction of 1.2%. Planned expenditure for 2024-25 is £153.5 billion, a real-terms year-on-year increase of just 0.2% (all amounts are given at 2022-23 prices).
Even the normally spineless NHS England has reportedly plucked up the courage to tell ministers that far from delivering an extra 40,000 appointments a year, trusts will have to slow down activity and cut services.
They have also told Streeting that his assumption that knackered and demoralised staff could be induced to work extra overtime in evenings and weekends to deliver the extra services for just time and a half is a non-starter. Much higher rates have had to be paid on previous occasions to get the right staff in place for Waiting List Initiative sessions.
And while the government blithely assured the Health Service Journal that “We will ensure the NHS has the funding it needs as we build a health service fit for the future,” there is no sign at all that ministers are willing to face up to the consequences of the black hole in NHS financing.
The figures are there for anyone to see. NHS England’s own financial performance update at the end of July pointed out that (despite months of top-down bullying of Integrated Care Boards (ICBs) and repeatedly refusing to accept deficit budgets), the final plans that were received from systems on 12 June showed 31 out of 42 systems still have a deficit plan for 2024/25, with planned overspends totalling £2.2bn.
NHS England has now said it will cover the £2.2 billion overspend, but warns: “this will leave no room to cover any further pressures. Therefore, it is imperative that all systems deliver their financial plan for the year.…”
Management consultants are now being wheeled in to pressure trust bosses into thinking and doing the unthinkable – dismantling services they have spent years developing, and turning patients away or making them join lengthening waiting lists.
“To support delivery of plans, those systems assessed as having the highest risk of non-delivery are engaging external support to accelerate their efficiency plan delivery, ensure that spend controls are operating effectively and ultimately to reduce the rate of spend to match the available resource.”
In other words if the government won’t change course ICBs and trusts will have to cut services to meet the budget.
The real situation is almost certainly worse than these figures suggest, because to judge from previous years, many of the eleven ICBs that were bullied into submitting an apparently balanced budget for the year have done so on the basis of huge assumed “efficiency savings”, many of which have yet to be identified, and many may prove to be unachievable.
And in every area similar pressures from ICBs have also forced trust boards to come up with similarly unrealistic financial plans, many of which seem doomed to fall short.
The driving forces behind deficits and hefty efficiency targets in some mental health trusts, for example, are a combination of non-pay inflation, unfilled vacancies leading to increased reliance on agency staff, substantial increases in demand, especially for patients with the most serious needs, and increased use of costly and inefficient private beds. It’s not clear how these pressures can be tackled without capital to expand NHS capacity.
On the bright side, business profits – not least the energy companies – bankers’ bonuses and corporate salaries have been riding high, and offer tempting targets for a government that needs to find ways to fund public services without raising taxes on the poorest.
Unite’s general secretary Sharon Graham’s call for a tax on wealth and super profits offers a welcome alternative to slashing winter fuel payments and other unpleasant and unnecessary measures that would drag us back into austerity rather than the promised “growth”.
The pressure for this type of progressive alternative needs to grow between now and the Budget if the NHS is to be repaired and rescued rather than cast adrift once more.
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