The Budget warnings for the NHS

Conservatives increase in real terms funding for NHS will be far short of the increases under Labour and will struggle to keep pace with the pressures of medical technology and an ageing population.

The NHS features little in Budget headlines – but dig deeper and the strain begins to show.

George Osborne confirmed an apparent protection in NHS budgets with a real terms increase in funding each year for the life of this Parliament  – though this will be far short of the increases under Labour and will struggle to keep pace with the pressures of medical technology and an ageing population.

The increase in VAT will cost the NHS an extra £250m – £300 million from the 2.5% rise, more than cancelling out the benefit to the NHS from not implementing Labour’s planned employer’s NIC rise, that would have cost £200m.

This raises a question about the Tories’ Cancer Drug Fund, which they previously claimed would be funded by their plans to cancel the NIC threshold rise.

The Budget will also have an impact on the burden of health, with measures such as freezing child benefit, no increase in alcohol and cigarette duty (where an increase in price could exert some impact on demand) and caps on housing benefit.  Tory pre-election concern on health inequality has been challenged with an Oxford University study forecasting this week’s Budget welfare cuts will lead to up to 38,000 additional premature deaths from welfare cuts (based on modelling welfare cuts’ impact in 15 European countries from 1980 to 2005).

But the NHS’s protected status may yet have a sting in the tail. Firstly, the impact of heavy cuts in other government departments and the Council Tax freeze will have a direct effect on key local authority services, given an average of 39% of local authority spending on adult social care comes from Council Tax. The Institute for Fiscal Studies is forecasting social services budget cuts of one-third on average by 2014/15.  The impact on the NHS will be stark, with increased stays of older people in hospitals and delays in discharges.

Secondly, there is concern that the NHS’s protected funding status may not last for long. The BBC economics editor suggestsAs the scale of the cuts [across other government departments] becomes clear, I wonder whether the NHS will be put back on the table as well

David Cameron’s high profile promise was : “I’ll cut the deficit, not the NHS”. Yet with a budget built on heroic assumptions  – of creating a hole in demand of 6.8% GDP by 2014 but with a growth forecast of 2.7% by then – it is a pledge that may well return to haunt him.

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17 Responses to “The Budget warnings for the NHS”

  1. Chris Malvern

    RT @leftfootfwd: The Budget warnings for the NHS: <VAT increase hits NHS hard, welfare cuts increase burden #condemfail

  2. Malcolm Evison

    The Budget warnings for the NHS | Left Foot Forward: via @addthis

  3. Mr. Sensible

    I’m already concerned about the NHS given that the new Government has ditched targets like the 4-hour waiting time guarantee.

  4. Will Straw

    After the Budget's VAT rise, what now for Cameron's Cancer Drug Fund? (via @leftfootfwd)

  5. Martin Searle

    RT @ChrisMalvern70: RT @leftfootfwd: The Budget warnings for the NHS: <VAT increase hits NHS hard, welfare cuts …

  6. Richard Blogger

    We will lose the NHS. I have detailed how on my blog (click on my name and read what I have to say). The latest scandal (and where in the mainstream press has this been reported?) is that the Treasury is blocking Lansley’s initial white paper, because he plans to remove accountability from NHS spending.

    “The white paper got bounced back because there was no way the Treasury could sign up to a proposal which handed £80bn of public money to 35,000 GPs who are basically unaccountable private businesses”

    Read that again. Lansley wants to hand control over £80bn of NHS commissioning to GPs where they will be one of the providers who can be commissioned. Yes, that is right, GPs will commission themselves. There will be NHS hospital closures in the next few years.

    Tell me, when did Lansley ever say this would happen during the election campaign? What happened to the “the NHS is safe with the Tories”?

  7. TheBiPolarBearMD

    RT @wdjstraw: After the Budget's VAT rise, what now for Cameron's Cancer Drug Fund? (via @leftfootfwd)

  8. Evidence based? Really?

    Now now partizan alarmists, lets inject a little of political reality into your blind screams of anguish.

    Richard Blogger; Hospitals were closing under labour (chase farm, Hemel Hampsted A&E etc) why is it that when the Conservatives do it it is an assault on the NHS and when Labour does it is a fine protection of a progressive (surely the most meaningless word on the planet) principle?

    Lets analyse your other concerns about why the tories are bad bad people. Firstly, even if this policy is as satanic as you claim, it has been stopped; by who? Who have thought it, it was the tories!! Secondly, to claim that GP’s are accountable private businesses is simply wrong. Under these plans, which lets remember are unconfirmed, GP’s would have to form consortia anyway. This proposal will actually increase accountabilty as it far easier to hold your GP accountable, even if you want to claim they are private businesses, than it is the endless bureacracy of the PCT.

    I’m all for partizanship, but i come on here expecting evidence based blogging.

  9. Evidence based? Really?

    Oh and Mr Sensible why are you concerned about 4 hour limits? If more money is going to A&E departments and they have the tools to treat people, do you honestly beleive that medical pracitioners will now treat people as quickly as their medical needs require?

    Many people don’t need to be treated within 4 hours, but many need to be treated instantly. The effect of a target is to distort treatment based on medical need, as whilst hospitals are required to treat a person due to a central target who has been there for 4 hours, that means the guy with a more urgent medical need who has been there for 30mins gets shunted down the queue.

    I firmly believe (and come on you lot love public sector workers too) that professionals will make the best decisions according to paitents, and will be better placed to decided this than the guy who decides a target can boost his parties popularity.

  10. Mr. Sensible

    ‘Evidence-based? Really?’ You have to have these kind of targets in a National Health Service.

    Patients have to be able to be guaranteed certain things.

    And lets remember that, for example, 4 hours is the latest that someone should be waiting for under these.

  11. Amir Rashid

    RT @wdjstraw: After the Budget's VAT rise, what now for Cameron's Cancer Drug Fund? (via @leftfootfwd)

  12. Evidence based? Really?

    Why? can’t medical professionals make these judgements? Is four hours the longest someone should be waiting, there is NO clinical evidence for that. If i break my finger and go to A&E there is no imperative for a random 4 hour limit. Clearly it is better that this happens, A&E staff recognise this, but there is no need to arbitarily prioritse me over a more serious case that has just been admitted.

    Trust the public sector workers, isn’t that what you should be all about?

  13. Andy

    “Evidence based? Really?” – I think you are missing the point. No-one is doubting the ability of medical professionals to make such decisions. I’m sure the targets are not intended to cause non-urgent patients to jump the queue ahead of urgent patients, and no medical professional would apply them in this way. If you arrive in A+E with major injuries or having a heart attack, I’m sure you will be seen straight away, regardless of how many people have been waiting 3hr 59min to have their broken fingers attended to. That is because the professionals will be doing their job in exactely the way you suggest.

    However A+E waiting times and resourcing are clearly an issue of public concern. Therefore the waiting time target does serve a useful function, in that it incentivises the not-always-accountable-or-democratic NHS decision makers to allocate a high level of resourcing to A+E departments, so that all urgent patients can be seen urgently (that goes without saying), AND all others can be seen within the target 4 hours. This high priority for A+E seems to me to be in line with what the public want and expect.

    However much the government may try to deny it, the NHS is facing real terms cuts – indeed around here (Hampshire) they have already begun. It is well known that the NHS actually requires increases a good few % ahead of inflation just to keep pace with technology and demographics, and it is clear that in the next few years it is not going to get them. So, call me cynical, but by removing targets (and the performance data that they lead to) it seems to me that various ‘alarm bells’ that would alert the public, the media etc to such cuts, are being removed before they get the chance to start ringing. All under the guise of decentralisation, of course.

  14. Why won't Cameron come clean on NHS cuts? | Left Foot Forward

    […] pause – that is sapping resources from the service. The NHS has also been badly hit by the VAT rise, and Primary Care Trusts are using back door methods to keep hospitals […]

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