OBR inflation figures mean budget cuts for health and schools

New inflation estimates by the OBR mean that the NHS and schools budget will fall in real terms over the spending review period. The Government had promised promised a 0.4 per cent increase in NHS funding.

New estimates of inflation by the Office for Budget Responsibility mean that the NHS and schools budget will fall in real terms over the spending review period. The Government had promised a 0.4 per cent increase in NHS funding over the spending review period and year-on-year increases in the schools budget.

The OBR forecast on 29 November (Table 3.6) predicted higher inflation than in its June 2010 forecast (Table C2). This means inflation is set to be at a higher level than the cash increases in NHS funding. New analysis by the House of Commons Library show the real terms cut.

In an exchange with John Healey in the Commons yesterday, Health Secretary Andrew Lansley denied that there was a real terms cut:

“No I don’t accept that for a minute. At the Spending Review we set out what met our commitment. I am very clear – I just told him – that revenue funding for the NHS will increase in real terms and it will do so because we did not listen to the advice of that party opposite, which in the run up to the Spending Review was to cut the NHS budget.

We didn’t do that, we were committed at the Spending Review to an increase in real terms. The GDP deflator will move from time to time but the commitment we set out was clear and will continue.”

Labour’s Health spokesman, John Healey, said today:

“This is hard proof that the Government is breaking its promise to protect NHS funding.”

“Andrew Lansley needs to come clean and explain to the public why the government has broken the promises it made on the NHS – promises that were at the heart of the Tory election, central to the Coalition Agreement and repeated at the Spending Review.”

The Spending Review also promised a real terms increase of 0.1 per cent in each year of the Spending Review for the 5 to 16s school budget. This will also become a cut over the spending review period if the OBR’s new forecasts prove correct.

Update 16.40

Last nights Channel 4 analysis of NHS funding using the latest predictions from the Office for Budget Responsibility has corroborated Left Foot Forwards findings, confirming:

“what looked like a tiny real-terms rise in NHS spending now looks like a tiny real-terms cut.”

Therefore there is no certainty that there will be a real-terms funding increase in Government spending on the NHS.

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20 Responses to “OBR inflation figures mean budget cuts for health and schools”

  1. Andy S

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  2. SSP Campsie

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  3. DeludedDonny

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  4. Jennie Walsh

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  5. Deborah Segalini

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  6. SSAT

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  7. Rising Stars

    RT @ssat: RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE repor …

  8. Save Our Services

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  9. John Turner

    RT @leftfootfwd: New OBR inflation figures mean the NHS and schools budgets will fall in real terms http://bit.ly/dXPqmE reports @wdjstraw

  10. Will Straw

    Despite Cam's protestations, NHS spending will fall in real terms despite Coalition Agreement http://bit.ly/fasp7z #pmqs

  11. False Economy

    RT @wdjstraw Despite Cam's protestations, NHS spending will fall in real terms http://bit.ly/fasp7z #pmqs

  12. Claire Spencer

    RT @wdjstraw: Despite Cam's protestations, NHS spending will fall in real terms despite Coalition Agreement http://bit.ly/fasp7z #pmqs

  13. Gary Stroud

    RT @wdjstraw: Despite Cam's protestations, NHS spending will fall in real terms despite Coalition Agreement http://bit.ly/fasp7z #pmqs

  14. Peter Pannier

    RT @FalseEcon: RT @wdjstraw Despite Cam's protestations, NHS spending will fall in real terms http://bit.ly/fasp7z #pmqs

  15. Will Straw

    @JohnRentoul Why inconclusive? NHS facing real funding fall http://bit.ly/fasp7z & reorg challenged by Tories http://bit.ly/fWjHSw

  16. Basma Hassan

    RT @wdjstraw: Despite Cam's protestations, NHS spending will fall in real terms despite Coalition Agreement http://bit.ly/fasp7z #pmqs

  17. Pauline Hammerton

    RT @FalseEcon: RT @wdjstraw Despite Cam's protestations, NHS spending will fall in real terms http://bit.ly/fasp7z #pmqs

  18. John Hickey-Fry

    RT @wdjstraw: Despite Cam's protestations, NHS spending will fall in real terms despite Coalition Agreement http://bit.ly/fasp7z #pmqs

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