England’s NHS budget is to increase by £10bn this parliament - equivalent to rising inflation.
But despite the government’s stated ‘ring-fencing’ of the budget, which will see it rise from £104bn to £114bn by 2014-15, increasing demand is anticipated to keep services under pressure.
It’s one of the lowest funding settlements since the creation of the NHS in 1948, and significantly lower than 4% real terms increases it’s benefited from historically.
Outlining the Spending Review, chancellor George Osborne said: “The NHS is an intrinsic part of the fabric of our country. It is the embodiment of a fair society.
“To govern is to choose. And we have chosen the NHS. That does not mean we are letting the health department off the need to drive forward real reform and savings from waste and inefficiency.”
The NHS is already under pressure to find £20bn of savings over the same period. However, the health budget fared significantly better than those for welfare, councils and the police which were all cut back.
They contributed to an overall £81bn reduction in public spending over four years. The £109bn structural deficit is the largest in Europe, Osborne said, with the government paying debt interest at the rate of £120m a day.
He said the cancer drug fund, promised before the election, would be created although it was unclear whether the pot would be as much as £200m as expected. Spending on health research would be protected along with some of the new hospital projects in the pipeline.
Meanwhile, an additional £2bn will be available for social care, and personal budgets will be expanded for children with special educational needs and adults with long-term care needs.
Commenting on the Spending Review, chairman of BMA council Dr Hamish Meldrum said: “The BMA is pleased that the government has kept its pledge to protect health spending, in real terms, over the course of this parliament. We also welcome the news that spending on NHS research will grow over the course of the spending review.
“Although the NHS budget has been relatively protected, the health service has to find cost savings of £20 billion by 2014 and this is already resulting in cuts to services, staff and rationing of treatments. The NHS continues to face the demands of an ageing population and the rising costs of medicines and new technology.
“Cuts in spending in other areas, such as welfare benefits, will also have a knock-on effect on demands on the NHS. Vulnerable groups often have complex health needs and it is essential that help remains available to them.”
The NHS has also been told to offer more support to social care with £1bn being earmarked for services which overlap the two sectors, such as rehabilitation for patients discharged from hospital.
Professor Dinesh Bhugra, president of the Royal College of Psychiatrists, said: “The ring-fencing of the NHS budget in the Spending Review is to be welcomed, as are the promises to expand psychological therapies for people with mental illness, provide treatment for mentally ill offenders in the criminal justice system, protect the medical research budget, and give an extra £2 billion for social care.”
He added: “Historically, mental health services have been an easy target for cuts because mental health has been poorly understood and stigmatised. It’s a challenge to us all to ensure this does not happen again.
“The RCPsych is most concerned that the mental health workforce should not become deskilled by a lack of training opportunities, or become demoralised by ill-thought out staffing cuts or service closures. These would have a disastrous knock-on effect on individuals, society and the wider economy. Efficiency savings do need to be found - but these must be informed by a robust evidence base of what really works.”
Shadow chancellor Alan Johnson said Labour supported moves to ring-fence the health budget, but said it opposed the current reforms.
The BMA’s Meldrum added: “The chancellor’s remarks about productivity are worrying. Doctors and nurses work extremely hard to care for their patients and will continue to do so despite the challenging times ahead. In the last decade the ‘productivity’ of healthcare staff has contributed to reduced waiting times and improvements in the quality of patient care. If the government is truly committed to reducing waste and inefficiency, their proposals for NHS reform should focus less on competition and more on a cooperative approach on delivering healthcare.”
Tags: Funding
Don’t forget that only 28% of the debt is foreign owned, the rest is domestically owned, the largest part of the remainder is owned by pension companies. So a large chunk of that £120m goes into the pensions of people in the private sector. There is always a silver lining