After a decade of austerity, the whirlwind efforts by the Johnson government to push through a £36 billion 3-year package of tax increases for the NHS and social care appears to represent a major change of policy, but will lead health and care leaders with ‘impossible choices’
While extra money is always welcome, the problem created since 2010, with real terms NHS funding in England each year falling further behind inflationary costs and the needs of a growing population, £36bn is still nowhere near enough to do all the things ministers claim it will do. Successive governments have been digging and deepening a black hole for the NHS and social care – and are now belatedly trying to escape the blame for the consequences, with the increased costs falling on the poorest workers.
With over 7,000 hospital beds in England still occupied by Covid patients and infection levels still high, and 14,000 front line beds that were occupied in 2019 now closed or lying empty as a result of the Covid pandemic, the pressure on the NHS and its stressed-out staff is enormous.
But the extra allocation to NHS England equates to £15.6bn from April 2022 to 2025 – well short of the £10bn extra for 2022-3 called for by NHS Providers and the NHS Confederation to cover ongoing COVID-19 costs (£4.6 billion); recover care backlogs (£3.5-4.5bn); and compensate for lost ‘efficiency savings’. The Health Foundation estimates an extra £17bn is needed by 2024 just to shrink waiting times to 18-week target levels.
A recent joint report from NHS Providers and the NHS Confederation, A reckoning: the continuing cost of Covid-19, drew on a survey of 116 of the 213 trusts covering acute, mental health, community and ambulance services to estimate that Covid has increased the cost of running frontline service by £4.6 bn a year, on top of the extra costs of recovering backlogs of elective care and the need for capital investment – a topic they raise but do not explore.
The report’s focus on the Covid-driven extra costs avoids any serious discussion of the extent to which the NHS had been chronically under-funded and waiting lists were growing BEFORE Covid.
It begins by emphasising the massive squeeze on NHS spending under David Cameron and Theresa May’s governments, and the inadequacy of the £33.9bn increase to 2024 announced under May and now endlessly quoted by the Johnson government:
“Between 2010 and 2019, the health service experienced the longest and deepest financial squeeze in its history. The five-year funding settlement announced in June 2018, while welcome, was only enough to enable the NHS to keep pace with increasing demand – it was never sufficient to fully recover performance levels or deliver truly transformative change.”
In social care, where the funding cuts have been even more severe, 95% of providers told ITV news they are unable to take on all the new clients in need of their help, while many more are unable fulfil their contracts for lack of staff.
Yet just £5.4 billion (£1.8bn per year) is allocated to social care over 3 years, supposedly to solve the chronic problems of the fragmented, privatised and dysfunctional social care system, where staff shortages are estimated by the GMB to rise as high as 170,000 – driven by low pay, stressful work, low status and turnover rates of 30% for nursing staff.
This is clearly nowhere near enough to address all of the problems – nor does a new formula for means testing charges for social care and capping personal spending at the eye-watering level of £86,000 address any of the issues that need reform.
£6 billion is to be divided between the devolved administrations in Scotland, Wales and Northern Ireland, where health and social care are already integrated – leaving £30 billion for England.
An extra £9bn is allocated to the Department of Health and Social Care for other purposes including training, vaccines.
Meanwhile, a new report from the Association of Directors of Adult Social Services indicates a rapid worsening of the situation, with nearly 300,000 people awaiting social care assessments, care and support or reviews, up by just over a quarter (26%) over the last three months: 11,000 of them have been waiting for more than six months, up by over 50% in 3 months.
The extra money represents a partial change of heart from Chancellor Rishi Sunak, who once said the government would give the NHS whatever it needed to cope with the Covid crisis, but who was more recently reported to have told colleagues that Covid-19 handouts “can’t go on forever”.
For an understanding of financial issues in the NHS it’s worth reading the recent update from Nuffield Trust’s Sally Gainsbury Checking the NHS’s reality – the true state of the health service’s finances. In a closely argued comment contrasting the “parallel reality” of Treasury, NHS England and commissioners’ assumptions with the actual situation facing NHS providers.
While noting the additional costs faced by the NHS (£2 billion a year to even start to fix the elective waiting list, and perhaps a further £6.6 billion needed from October onwards to deal with ongoing Covid admissions to hospitals) Gainsbury also highlights the £2bn shortfall of funding that has been a feature of NHS plans every year since the 2015 Spending Review:
“The same reality gap is present each time: activity assumptions understating the cost pressures brought by increasing patient numbers by around £1 billion each year, accompanied by a further £1 billion or so over-optimism on the scale of costs that could be permanently (i.e recurrently) removed from providers’ cost bases.”
She goes on to calculate what how the underlying income and cost base of providers would have changed by now had it not been for the pandemic, estimating that the current funding gap has widened to £5 billion.
The gaps and deficits are no accident: they are a result of deliberate policy decisions – and patching up the NHS and social care is now so costly even £12bn a year falls well short of what is needed.
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