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| George Osborne's short-term relief for the NHS falls short of a cure | George Osborne's short-term relief for the NHS falls short of a cure |
| (3 months later) | |
| The chancellor’s promise of more cash for the NHS masks substantial cuts outside the core funding, while the increase fails to keep pace with rising demand. The spending review might mitigate some of the worst extremes of the immediate crisis, but it will not secure long-term sustainability or changes to the way care is delivered. | The chancellor’s promise of more cash for the NHS masks substantial cuts outside the core funding, while the increase fails to keep pace with rising demand. The spending review might mitigate some of the worst extremes of the immediate crisis, but it will not secure long-term sustainability or changes to the way care is delivered. |
| As Anita Charlesworth, chief economist at the Health Foundation, pointed out, substantial areas of critical spending have been stripped out of the definition of the NHS and the wider health system will suffer a real-terms cut of more than 20% by 2020-21. This includes junior doctor training, health visiting, health education, sexual health and vaccinations. | |
| On top of this public health is being hit hard, with a 4% cut every year in real terms. The government is also going to consult on whether public health spending should be fully funded by business rates. | On top of this public health is being hit hard, with a 4% cut every year in real terms. The government is also going to consult on whether public health spending should be fully funded by business rates. |
| Related: Views from local government on George Osborne's spending review | Related: Views from local government on George Osborne's spending review |
| Government grant to councils will be more than halved by 2020, although the Treasury claims this will be covered by increased revenue from council tax and business rates. Allowing councils that provide social care to impose a 2% levy on council tax to help pay for it will provide some relief, but it is far from a solution. As so often, it will be the areas with the highest levels of deprivation, and therefore the lowest tax base, that will benefit least from this, while they will feel the sharpest pain from the cuts in government grant. | Government grant to councils will be more than halved by 2020, although the Treasury claims this will be covered by increased revenue from council tax and business rates. Allowing councils that provide social care to impose a 2% levy on council tax to help pay for it will provide some relief, but it is far from a solution. As so often, it will be the areas with the highest levels of deprivation, and therefore the lowest tax base, that will benefit least from this, while they will feel the sharpest pain from the cuts in government grant. |
| The cumulative effect of all these changes will mean that more people will go into hospital, and discharging patients into social care as soon as they are ready to leave will continue to be a serious problem. | The cumulative effect of all these changes will mean that more people will go into hospital, and discharging patients into social care as soon as they are ready to leave will continue to be a serious problem. |
| Capital spending is being cut in real terms, while the imposition of a 0.5% payroll tax – a levy on the staff costs of major employers to fund apprenticeships – is a new and significant charge. | Capital spending is being cut in real terms, while the imposition of a 0.5% payroll tax – a levy on the staff costs of major employers to fund apprenticeships – is a new and significant charge. |
| The core NHS budget will rise by £4.5bn in real terms over the next five years. This is less than 1% a year above inflation and means, as the Health Foundation points out, that in real terms, health spending per person will be almost unchanged by 2020 compared with the beginning of the decade, despite the substantial increase in need from an ageing population. | The core NHS budget will rise by £4.5bn in real terms over the next five years. This is less than 1% a year above inflation and means, as the Health Foundation points out, that in real terms, health spending per person will be almost unchanged by 2020 compared with the beginning of the decade, despite the substantial increase in need from an ageing population. |
| Related: What's it like to work in the NHS? Share your experiences | Related: What's it like to work in the NHS? Share your experiences |
| The front-loading of the increase is welcome and will ameliorate some of the worst effects of the current financial crisis in the acute sector. But it takes heroic optimism to believe that this will give the NHS the wriggle room to reform the way care is delivered to make the current range of NHS services sustainable for the long term, notably by moving much more care out of hospital. Barely anyone believes the £22bn of efficiency savings assumed in the Five Year Forward View can be delivered, and it is even harder to see how the financial settlement will fund a proper seven-day service, as the government has again promised. | The front-loading of the increase is welcome and will ameliorate some of the worst effects of the current financial crisis in the acute sector. But it takes heroic optimism to believe that this will give the NHS the wriggle room to reform the way care is delivered to make the current range of NHS services sustainable for the long term, notably by moving much more care out of hospital. Barely anyone believes the £22bn of efficiency savings assumed in the Five Year Forward View can be delivered, and it is even harder to see how the financial settlement will fund a proper seven-day service, as the government has again promised. |
| Perhaps the most striking perspective on health funding comes from looking at the GDP figures. The share of our national wealth that we devote to publicly funded health will fall from 7.3% this year to an astonishingly low 6.7% by the end of the decade. That is the true measure of the value we put on our healthcare and puts us well behind many other developed countries. | Perhaps the most striking perspective on health funding comes from looking at the GDP figures. The share of our national wealth that we devote to publicly funded health will fall from 7.3% this year to an astonishingly low 6.7% by the end of the decade. That is the true measure of the value we put on our healthcare and puts us well behind many other developed countries. |
| Overall this is a tough settlement for the NHS. It will not allow the health service to deliver the range and quality of care that the public expect and deserve. It will provide some short-term relief, but there is a high risk that the degradation of the financial position will largely continue. The chancellor has given the NHS some remission, but he is a long way from providing a cure. | Overall this is a tough settlement for the NHS. It will not allow the health service to deliver the range and quality of care that the public expect and deserve. It will provide some short-term relief, but there is a high risk that the degradation of the financial position will largely continue. The chancellor has given the NHS some remission, but he is a long way from providing a cure. |
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