A LITTLE ASIDE FROM BOATBUILDING:
I am no longer a regular GP, but I have witnessed and experienced the strain on NHS services and workers from the perspective of General Practice, which has been particularly hit by the reduced funding under the recent period of austerity. So, perhaps more than most, I maintain a close interest in the NHS, and was interested to hear the recent announcement from our new Prime Minister, of an extra £1.8 billion for the NHS. This announcement bears close scrutiny.
The headline figures are an extra £1.8 billion over the next five years, including £1billion for the coming year.
The 2018/19 NHS England budget was £115 billion, so an extra £1 billion for this year is only an additional 0.86%.
THE BACKGROUND:
Accounting for inflation, NHS spending has historically grown at an average annual rate of about 3.7% from 1950/51. However, the average growth between 2009/10 and 2014/15 under the Coalition government was 1.1% and from then to 2016/17 under the Conservative government was 2.3%.
Last year the government announced that an additional £20.5 billion in real terms will be made available for the NHS in England by 2023/24. When it was announced, this meant an average increase on the NHS’s budget of around 3.4% a year (i.e. nearly back to average annual increases). However, with inflation over the next few years set to be higher than expected, the actual real terms increase will be less than 3.4%.
At the time, health experts said that this money will “help stem further decline in the health service, but it’s simply not enough to address the fundamental challenges facing the NHS, or fund essential improvements to services that are flagging.” In January 2019 the National Audit Office said: “There is a risk that the NHS will be unable to use the extra funding optimally because of staff shortages.”
Across the country, many NHS trusts are in deficit, because they are spending more than they’re bringing in.
The NHS was also asked several years ago to find £22 billion in savings by 2020, in order to keep up with rising demand and an ageing population. So, the Government is promising nearly the same amount of increased spending over five years as the amount of savings asked of the NHS for the same period!
IS THIS £1.8 BILLION NEW MONEY?
The Nuffield Trust has said that this money isn’t new. It says the £1 billion added to the NHS capital budget was actually “cash hospitals and other NHS trusts already have, but have been forbidden to spend. They earned it last [year] in incentive payments for cutting their costs”.
But this money couldn’t be spent on the day-to-day running of hospitals, so it had to be spent on capital projects instead: things like IT, equipment or new hospitals. Ironically, with a total spending limit placed on capital spending, trusts found they weren’t going to be allowed spend all the incentive scheme money once they had it.
The Health Foundation says that “As a result of these spending limits NHS trusts were asked to reduce their capital spending plans by 20% … This meant that some trusts had money available to them which they were being asked not to spend.” This 20% reduction has now been reversed with the announcement of money for the NHS.
As the Health Foundation puts it, from the perspective of NHS trusts, this is “money they’d already thought they could spend”. But the Health Foundation also says that from the Treasury’s perspective it’s correct that this is ‘new money’—as it’s an extra £1 billion of spending this year that it hadn’t planned for previously.
The Nuffield Trust had the same view. It says that it “will feel like a new spending commitment for the Treasury. That is because it will no longer be able to recycle NHS trust cash stored in government coffers to fund other bits of government funding, and the total amount of money going out will therefore increase. However Mr Hancock was wrong to claim this was ‘new money’ to the NHS. From the point of view of trusts it is not.”
TO CONCLUDE:
NHS spending in the past decade has increased annually much less (about 60-70% less) than the average annual increase since its foundation.
The latest announcement is for a 0.8% annual increase for this year – hardly likely to reduce the approx 40% of trusts in deficit!
The Treasury will be spending more than it expected on the NHS, but NHS Trusts will be accessing money that they had already earned (but told not to spend).
We have learnt not to expect our representatives in Government to be straight with the voters, and tell us how it really is. The NHS remains a political football, when what is needed is a cross-party consensus, long-term planning and public agreement over what should and should not be funded.
Silly anachronisms continue. For example, a well-off patient with an under-active thyroid, has ALL their NHS prescriptions free, not just their thyroid replacement tablets. Conversely, someone who is struggling to make ends meet, but not in receipt of key benefits, may be paying for three or more items for their chronic eczema/ asthma/hypertension …
The NHS is a ‘holy cow.’ Politicians can play smoke and mirrors with funding pledges and announcements, but short-termism, and fear of upsetting patient groups, means that nothing really changes.