Government would like to present the recent spending review as a turning point in its economic policies, with a round of investment that will stimulate economic growth. Rachel Reeves announced a 3% rise in day to day NHS spending over the next three years, translating by 2028/9 into ‘an extra £29bn per year for the day to day running of our the health service’. The Department of Health and Social Care budget will increase from the £202bn planned for the current year to £211bn next year, £221.3bn in 2027/28 and £232bn in 2028/29 – representing average annual real-terms growth of 2.8% a year. Within this, the NHS England budget will rise from £195.6bn this year to £226.1bn in the final year of the review period – a 3% average real increase (i.e. adjusted for inflation).
Any boost to funding is welcome news given the glacial speed of progress in rebuilding the NHS so far, but the rises must be seen in context. For example, the £22.6bn in the last budget was trumpeted as the largest increase since 2010 but In reality, it was eaten up by inflation, pay rises, population growth and the expansion of elective care, leaving the NHS with substantial unfunded spending pressures.
Funding increase nowhere near enough to be transformative
The annual 3% rise compares with an average annual increase of 1.2% from 2010-20 but 6.2% over the decade 2000-10. It is less than the historic increase in annual NHS budget of 3.7%. Despite this, the Chancellor thinks it should be enough to ‘get the NHS back on its feet and ‘fit for the future’, enabling the NHS to cut waiting lists, improve patient care and modernise services, and support Labour’s plans to move care back to the community. The figure includes up to £10bn on technology and digital transformation, GP training ‘to deliver millions more appointments’, and rolling out mental health support to all schools. However, the NHS Confederation was quick to point out that £29bn would not cover the cost of new treatments and a large part would be swallowed by staff pay. The capital budget remains largely the same as announced in the autumn budget. This is despite the need for new hospitals and equipment, and the £13.8bn of backlog maintenance needed to bring estate up to standard.
The ’black hole in NHS finances’
The NHS has been badly damaged by austerity and has much ground to make up if it were to be restored to its previous status. Should the average historic annual spending increase on the NHS have been maintained rather than reduced from 2009 onwards, it would have received an additional £423bn. This particular financial ‘black hole’ is ignored by a Labour government which continues to hope that new technology and unrealistic efficiency saving targets will make up this deficit. In addition, the huge gap in capital funding remains largely unaddressed. This, together with social care failings, were highlighted by Lord Darzi, who stated: ‘A desperate shortage of capital prevents hospitals being productive. And the dire state of social care means 13% of NHS beds are occupied by people waiting for social care support or care in more appropriate settings. The result is there are 7% fewer daily outpatient appointments for each consultant, 12% less surgical activity for each surgeon, and 18% less activity for each clinician working in emergency medicine’. A £4bn increase for adult social care in the spending review is unlikely to help relieve pressure on the NHS or provide much in the way of support to this struggling sector.
Labour denial of underfunding
The last Conservative government commissioned the King’s Fund to explore why the NHS could not tackle the care backlog, only to receive the answer that it was down to austerity, years of denying funding, too few staff, too little equipment and too many outdated buildings. Yet Labour still believes that it can restore the NHS by ‘reform’ without making up the cuts in funding. Population growth, health inequalities and changes in illness patterns have increased demand for care and mean that spending in relation to health need has actually fallen despite increases in headline funding. UK spending on health care fell since 2009 to ninth out of the G10 countries (including France, Germany and Netherlands). Average day-to-day health spending in the UK between 2010 and 2019 was 18% below the EU14 average and growth was significantly lower than the UK historical average. The continued under funding has led to staff vacancies, worn out equipment, crumbling hospitals and deteriorating performance.
While the Chancellor recognised in her speech that a strong NHS is necessary for a strong economy, she referred tellingly only to ‘free at the time of use’ rather than ‘publicly provided’. It remains to be seen how much of the increased funding may be spent on outsourcing work to a private sector that Labour wrongly insists has ‘spare capacity’ and is there to ‘help’ rather than to generate profit. Ophthalmology provides a ready example of the pitfalls in this approach, including the undermining of NHS eye services, harm to patients, and massive profits draining away to shareholders and on loan repayments.
Welfare not warfare
Despite the spending review, overall spending on public services will remain below levels of both the previous Labour and the last eight years of Conservative administration. Meanwhile, money is to be found for increased spending on the military as the government chooses to see ‘defence’ as a major priority. This, rather than the provision of decent education, housing, jobs, environment and services is seen as the way to ‘protect citizens’. The recent defence review illustrates the flawed and unimaginative thinking here, with a failure to approach human security in a more innovative way and even acknowledge climate change as an existential threat.
KONP will continue to argue that the NHS must be funded to succeed, and that becoming ‘battle ready’ should first and foremost mean improving people’s lives in the fight against poverty and inequality. If we want to restore the NHS to being the best system among rich nations as it was only 10 years ago, we must spend more on health care. It is unsustainable to keep asking the NHS to do more with less, and if the NHS fails the economy will fail. The spending review does not change this reality.
Dr John Puntis
Co-Chair Keep Our NHS Public
Hope Worsdale, Head of Digital Comms and Impact at Just Treatment, said:
“Every day we work with patients who have had to bear the consequences of a decade and a half of chronic underinvestment in the NHS – from people who have lost loved ones to unacceptable ambulance delays, to patients whose lives have been put at risk by delays to urgent care. Whilst an increase in NHS spending is welcome, the reality is that the announcements made in the Spending Review simply won’t be enough to tackle the scale of the crisis facing our NHS, especially when billions of it will be funnelled away to private healthcare companies. What patients really need to see is sustained and significant investment in public healthcare, and an end to expensive and damaging outsourcing.”
Dr Julia Patterson, founder and CEO of EveryDoctor said:
“This government came to power promising to rebuild the NHS, and the public desperately needs this to happen. With crumbling NHS buildings, staff morale incredibly low, overcrowding in emergency departments and millions of people on NHS waiting lists, the situation is an emergency. How then, can the chancellor justify a real-terms increase in spending for the NHS of 3%, which is lower than the average real terms increases we have seen over previous decades? These numbers aren’t just numbers; these percentages don’t just create lines on a graph. Lack of investment in the NHS over the past 15 years has cost many people their lives. We believe that every single patient deserves to be safe in the NHS. If Rachel Reeves agrees, then she will need to commit much more investment than this. Patients’ lives should not be lost because of poor political choices.”
Spokespeople are available for broadcast interview. Contact in the first instance for all spokespeople – Samantha Wathen, Press Officer for Keep Our NHS Public [email protected]
or Call/WhatsApp: 0777 6047472
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