This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/society/2017/oct/10/nhs-england-boss-calls-for-extra-budget-funds-to-cope-with-rising-demand

The article has changed 7 times. There is an RSS feed of changes available.

Version 1 Version 2
NHS won't cope with rise in demand without more money, boss tells MPs Pay cap on NHS staff to be lifted, Jeremy Hunt tells Commons
(about 9 hours later)
The health service must receive more money in next month’s budget if it is to cope with the rapidly rising demand for care, the boss of the NHS in England has warned Theresa May. The health secretary has announced that the cap on NHS staff pay is to finally be scrapped – but has not said if the government will give the health service extra funding to cover the cost of whatever rise is finally agreed.
Simon Stevens told MPs on Tuesday that the funding the government has earmarked for the NHS in the next two years is not enough and needs to be “amended”. Jeremy Hunt told MPs on Tuesday that a seven-year run of 1% rises or pay freezes “wasn’t sustainable” and would come to an end with next year’s award for England’s 1.4 million NHS staff.
Asked about the NHS’s funding at a session of the Commons cross-party health select committee, the NHS England chief executive said: “Looking forward to the pencilled-in funding for the next year, and year after, it looks extremely challenging.” He said he had been given “leeway” to do so by the chancellor, Philip Hammond, but when questioned if the government would cover the cost he said: “That is something I can’t answer right now because the latitude that the chancellor has given me in terms of negotiating future pay rises is partly linked to productivity improvements that we will negotiate at the same time.”
If the sums allocated were not amended it would be “very hard” for the NHS to do what it is being asked to do, he said. That immediately raised concerns about whether the service will receive any extra funding increase in next month’s budget to help it foot the bill for a pay increase that has long been demanded by unions.
“Decisions taken on 22 November will determine the shape of the NHS for the next two years.” Simon Stevens, the chief executive of NHS England, made clear that the Treasury would have to boost the service’s budget as it could not afford to meet the pay rise given its tight finances.
Comparing the amount the UK puts into healthcare against other major European countries, Stevens said: “We’re spending £23bn a year less on the NHS than if we were spending at Franco-German levels – and there are consequences of that.” “The secretary of state has said earlier today that the pay cap has been lifted,” he told the Commons cross-party health select committee. “That does need to be funded.”
The NHS chief added to the pressure on Theresa May and the chancellor, Philip Hammond, over NHS funding by declaring that next year’s pay rise for NHS staff would have to be funded by the government, not from NHS budgets. Unions greeted Hunt’s move with deep scepticism. Dave Prentis, the general secretary of Unison, said scrapping the pay cap would only be meaningful if it led to a “proper” pay rise.
His remarks flag up a key difference of opinion with Jeremy Hunt, the health secretary, who earlier on Tuesday told MPs the 1%-a-year pay cap for NHS staff was being lifted – but that increases would have to be funded from improved productivity. “The government’s announcement looks worryingly like a smoke and mirrors move, with talk of ‘productivity improvements’,” he said.
“The secretary of state has said earlier today that the pay cap has been lifted,” said Stevens. “That does need to be funded.” “NHS staff, patients and services shouldn’t be made to suffer to fund a pay rise.”
Every increase of one percentage point in the pay of NHS staff in England costs the service about £500m. Health unions recently submitted a claim for a 3.9% pay rise next year, plus £800 to help make up for seven years of pay freezes or 1% rises. Fourteen health unions, including those representing nurses, midwives and healthcare assistants, recently said they wanted their members to receive a 3.9% pay rise in 2018-19 plus a further £800-a-head payment to help make up for the fall in the real value of their salaries since 2010.
Stevens’ message was endorsed by Jim Mackey, the chief executive of NHS Improvement, the service’s financial regulator. They claim that NHS staff have seen their incomes eroded by as much as 15% since austerity began that year.
“If that sort of thing [the lifting of the pay cap] does happen, it needs to be funded. The NHS is delivering very serious levels of efficiency and it’s very hard to see how that would be internally financed,” he told the committee. Kevin Brandstatter, a national officer with the GMB union, said: “If there is no new money then it’s a con trick to claim that the pay cap has ended.”
Stevens said it was unreasonable to expect the NHS’s 1.4 million staff in England to keep receiving real-terms pay cuts indefinitely, but that any rises would need to be funded outside the existing pay settlement. Hunt told the Commons that he hoped his announcement that the cap was being lifted would lead to a “win-win” for NHS staff and the government.
The Department of Health’s budget is £123.7bn this year, 0.55% more than last year’s £123bn. It is due to go up to £124.4bn next year – a rise of 0.58% – and then up by 0.55% to £125.1bn in 2019-20. Hunt has helped persuade Theresa May and Hammond that the pay cap was a key reason why so many nurses, paramedics, doctors and other staff were leaving the NHS and why it was having such trouble recruiting enough replacements.
NHS finances experts say Hunt’s expectation that enhanced productivity will generate funds for the pay rise are unfounded and unrealistic. Stevens told the health committee that NHS staff deserved a pay rise but that the Treasury would have to cover the cost.
“Deliberate government policy over the last seven years has been to cut the amount trusts are paid year after year for each patient,” said Sally Gainsbury, of the Nuffield Trust health thinktank. “Over time it will be necessary for NHS staff to get rates of pay that are consistent with the rest of the economy,” he said.
“A hospital today is paid around £760 to treat a patient they would have received £1,000 to care for in 2010. Hospitals have tried to cope with those cash and real-terms cuts by cutting their costs, but they haven’t been able to keep up, which is why they overspent by an underlying £3.7bn last year. He also warned May and Hammond that the NHS will come under serious strain if the tiny budget increases it is due to receive in the next two years are not “amended” to help it meet rising demand.
“This year they have been asked to make a further £3.6bn in efficiency savings to help the government balance its books. That’s twice as much as the government’s own review into hospital waste found was possible.” “The budget position for funding currently pencilled in for the NHS for the next year and the year after looks extremely challenging and, if not amended, I think it is going to be very hard for the NHS to do all that has been asked for it over the course of the next year and the year beyond,” he said.
The NHS has £323bn less to spend than France and Germany, both of which put a greater proportion of their GDP into healthcare, he added.