With an election looming, on past form NHS chiefs might have been expected to hold back on driving through ‘unpalatable’ measures to cut spending this year, partly because ministers would not normally want to see unpopular cuts in the run up to polling, and partly in the hope of some relief to come if there is a change of government.

Sadly this does not seem to be the case this year. Ministers seem resigned to a thumping defeat and intent only on blaming NHS failings on Covid and striking doctors, while leaving the biggest possible mess behind them.

For its part, Labour has spent the last 18 months insisting that they don’t see the need to increase NHS spending, claiming “reforms” and ‘doubling the number of scanners’ will somehow solve the problems for free, and promising they will not raise additional funds through taxation.

So with no light visible for NHS managers, staff or patients at the end of a seemingly endless tunnel of austerity, NHS England is therefore once more cracking the whip over the 42 Integrated Care Boards (ICBs) which have for a second year running submitted financial plans for 2024/25 that leave a combined £6 billion deficit.

There is no reason for ICBs to exaggerate their likely deficit, so for them now to publish any lower figure without substantial changes on the ground would be a deception. Nevertheless it seems certain that – after a month or two of intensive bullying by NHS England, ICB by ICB – these initial forecasts will (as in previous years) be followed by more optimistic plans for lower deficits, coupled with hopes of “efficiency savings”.

Looking back over the way the total projected deficit has fluctuated in the past year, the HSJ notes: “The latest forecast for 2023-24 is for a deficit of around £1.5bn. However, this figure takes into account the £800m bailout NHSE provided trusts in November.”

The 2024 Spring Budget allocated an additional £2 billion bail-out to the NHS to help cover costs of pay settlements and ongoing industrial action, so the books may appear to balance, despite the underlying problems.

But Jeremy Hunt did not change the NHS allocation for the coming financial year, plunging us once again into a scenario of cutbacks and crumbling hospitals facing mounting bills for backlog maintenance.

The Institute of Fiscal Studies (IFS) points out NHS spending (after adjustment for inflation, in 2022-23 prices) will be £166.2bn in 2024/25.

This is £2 billion (1.2%) lower than the £168.2bn in 2023-24. And because outright cuts in spending are far less common than real-terms cuts (increases below inflation and demand pressure) the IFS argues this represents the largest real terms cut in spending since the 1970s.

The HSJ warns that the budget squeeze means NHS organisations are facing intense pressure to cut staffing numbers. This will effectively reverse the process many local systems embarked upon in the last two years, seeking to reduce spending on agency staff by increasing their permanent workforce.

The Lowdown recently reported on King’s College Hospital FT seeking to cut back 600 jobs that had been added to the establishment for this very reason. In East Kent, the hospitals trust facing a £70m deficit for 2023/24 has targeted admin staff for job cuts.

The HSJ now reports similar “horrible” conversations on service cuts taking place among NHS bosses, and quotes a Midlands source who said “We’ve got virtually no workforce growth in our plan now… and we’ve still got a deficit. To get to breakeven we’d have to be looking at quite a significant workforce reduction.”

The dilemma has provoked an unusually forthright comment from the NHS Confederation that represents commissioners and providers. Its ICS Network chief Sarah Walter told the HSJ the NHS has been given an impossible target that will require more bail-outs from government:

“a fictional funding agreement with tacit acknowledgement that more money will arrive throughout the year. This is no way to plan and run a health system fit for the 21st century and provides poor value for money for taxpayers.”

The ability of the NHS to improve efficiency and speed patients’ discharge from hospitals is impeded by the chronic crisis in social care and the lack of a well-funded multi-year strategy to develop services, as the Commons Public Accounts Committee has once again warned.

Committee chair Dame Meg Hillier said years of fragmented funding and the absence of a clear roadmap had brought the adult social care sector “to its knees”. “Waiting lists are rising, the sector is short tens of thousands of essential staff, and local authority finances are being placed under an unsustainable amount of pressure,” she said.


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