The inadequate support for the NHS and social care contained in last week’s business-focused Budget – coming as it does against a background of billions wasted on private sector contracts during the pandemic, and representing a reversal of the Chancellor’s earlier ‘blank cheque’ stance – reflects poorly on the government’s commitment to sustainable long-term investment in the health service.
Analysis last month by NHS Providers (NHSP) of the delayed NHS 2019-20 annual accounts shows that the service’s finances were already stretched and deteriorating going into the pandemic, despite the funding settlement linked to the Long Term Plan.
Total provider deficit rose by almost £80m year-on-year, to £910m, largely because the overall NHS England (NHSE) budget “had not risen fast enough to meet the rapidly growing demands presented by an ageing population, more complex long-term conditions and technological advancement”.
NHSP went on to highlight the considerable diversion of funding – including a one-off transfer of £1bn – into the acute sector, to the detriment of the financial position of providers in the mental health, ambulance, specialist and community sectors, just as mental health and community services reported significant additional demand.
And despite a £500m rise in ‘everyday’ capital expenditure in 2019-20, NHSP also noted that the cost of the capital maintenance backlog grew 40 per cent over this period, to £9bn.
Last week’s Budget did little to address the challenges presented by an increasingly outdated NHS estate during the pandemic – such as hospitals struggling to maintain adequate flows of oxygen, and difficulties in rapidly expanding or repurposing older facilities to deal with large numbers of critically ill patients – and represents a continuing failure to restore funding on the NHS and social care to pre-2010 levels.
In an earlier NHSP report, published shortly after the 2019 general election, the organisation pointed out that if NHS and social care spending had risen annually in line with the average before the coalition government was elected in 2010, the Department of Health & Social Care’s (DHSC) budget would have already been £35bn higher.
Those ten years of real-term cuts led to the loss of 9,000 general and acute hospital beds, along with 5,200 mental health beds – a deficit now made all the worse by the closure of thousands more during the pandemic due to infection control, social distancing and the transfer of staff to covid wards and intensive care units (ICUs).
What little health service-related financial support there was in the Budget pertained to vaccine development and distribution, thought to be worth around £1.65bn. The ‘red book’ published alongside the Chancellor’s statement revealed that NHSE was set to get £9bn less over the coming year, compared to 2020-21.
The Treasury appears to be slashing the emergency pandemic funding received by the DHSC last year by more than 60 per cent for 2021-22, presumably on the assumption that the extra costs resulting from covid-19 will plummet once the vaccine rollout gains traction.
That’s an assumption not shared by organisations like the Health Foundation, which suggests that at least £10bn more this year is needed to meet the ongoing costs of the pandemic, notably for the huge backlog of elective surgery (in December, almost 225,000 patients had waited more than a year for treatment, and more than 4.5m ‘referral to treatment’ patients were waiting to start treatment, according to NHSE) and the extra demand for mental health services.
This reduction in support for the NHS, while the long-term impact of covid-19 is still not clearly understood, appears dangerously premature. NHSP chief executive Chris Hopson worries that there has been remarkably little commentary on what the NHS needs to do to live with the virus over the longer term.
In a statement issued last month, Hopson says, “As HIV has shown, we can inoculate ourselves against the effects of viruses and manage their impact through ever more effective treatments. But viruses have a nasty habit of persisting in the community for a long time. This will have profound consequences for the NHS for many years to come.”
He maintains that, in order to cope long term with covid-19, a sustainable workforce model – one that doesn’t depend on volunteers, or on diverting GPs and NHS trust staff from their existing roles – to deliver a national vaccination programme for years to come will need to be developed.
Hopson also argues that the current ‘test and trace’ set-up needs quickly bringing up to the standards seen in south-east Asia and in countries like Canada, and that significant hospital bed, ICU and ambulance ‘surge capacity’ or ‘buffer’ needs to be created as the virus persists and mutates.
“Whichever number you look at – beds, nurses, doctors or diagnostic equipment – the resources [currently] available to the NHS compare poorly with key comparators like France and Germany,” he adds.
So the Chancellor’s failure in this month’s Budget to bolster the five-year funding settlement agreed with NHSE in 2018 – awarding it an average increase of just 3.4 per cent a year above inflation until 2023/24 – with extra cash to cope with the long-term impact of covid-19 looks mean spirited, to say the least.
Even when the five-year funding settlement was first announced, more than 12 months before the pandemic, the cash on offer was seen as barely sufficient.
The Health Foundation, in conjunction with the Institute for Fiscal Studies, estimated at the time that the figure of 3.4 per cent was below the level required to further improve and modernise the NHS, and that the extra investment was “just enough to maintain current standards”.
Little allowance had been made for rising pharmaceutical costs, an ageing population or rising demand, the latter particularly due to multi-morbidity chronic disease.
No mention of nurse recruitment or remuneration was made in last week’s Budget either, despite the heroic contribution of NHS staff during the pandemic and concerns over an ‘exodus’ from the health service because of stress levels and low salaries.
Vacancy rates among nurses across England have remained static – around 10 per cent, or 36,500 – for the past two years, and have actually increased in the South East (to 11.6 per cent), contrary to widely disputed government assertions about being firmly on track to delivering 50,000 additional nurses by 2024.
However, the news last week that NHS salaries were set to rise by a miserly 1 per cent – based on the government’s own recommendation to an independent pay review body – unsurprisingly hit the headlines and generated threats of strike action from trade union Unite and the Royal College of Nursing. Subsequent analysis by the TUC shows that the figure of 1 per cent represents a drop of £2,500pa in real terms, compared to 2010 salary levels.
So… has the Chancellor lived up to his March 2020 Budget pledge to provide the NHS with ‘whatever it takes’? The evidence in his latest Budget sadly points in the other direction, but one can only hope the government – reportedly happy to have paid staff from Boston Consulting Group £6,000 a day to work on the state-funded but privately run test-and-trace programme last year – backs down in the face of public opinion and at least ups the pay offer to nurses. Such u-turns have not been unknown in recent months.
Dear Reader,
If you like our content please support our campaigning journalism to protect health care for all.
Our goal is to inform people, hold our politicians to account and help to build change through evidence based ideas.
Everyone should have access to comprehensive healthcare, but our NHS needs support. You can help us to continue to counter bad policy, battle neglect of the NHS and correct dangerous mis-infomation.
Supporters of the NHS are crucial in sustaining our health service and with your help we will be able to engage more people in securing its future.
Please donate to help support our campaigning NHS research and journalism.
Comments are closed.