The Spending Review: why health and care will not go hungry - yet

Stefano Gortana

30 November 2015

Chancellor George Osborne delivered the results of the government’s spending review last week amidst great pressures on health services. An overwhelming majority of the junior doctors that voted did so in favour of strike action this winter, the NHS is in a worse position on almost every measure than this time last year and doubts persist regarding the possibility of £22 billion in efficiency savings. This is of course in addition to competing budgetary pressures, including calls to increase security and counter-terrorism spending after the dreadful Paris attacks. Many were hoping to see explicit support for health and care in this spending review, and the government seems to have come through, at least in the short-term.

Health and care received considerable attention as expected

Mr. Osborne explained that “the first priority of this government is the first priority of the British people – our National Health Service”, and reiterated the government’s commitment to continue increasing spending on health and care. Perhaps in response to the growing calls for a large portion of the £8 billion budget promised over the course of this parliamentary term, the Chancellor revealed that not only is the government still committed to a £10 billion real increase in the health service budget but “the first £6 billion would be delivered up-front next year” . He said, “The NHS budget will rise from £101 billion today to £120 billion by 2020-21”, which is “the largest investment in the health service since its creation”. 

What does this mean? The Chancellor argued that “patients will see more than £5 billion of health research, in everything from genomes to anti-microbial resistance to a new Dementia Institute and a new, public health facility in Harlow”, as well as “800,000 more elective hospital admissions, 5 million more outpatient appointments and 2 million more diagnostic tests”. He also mentioned new hospitals, cancer testing within four weeks and a “brilliant NHS available seven days a week”. Finally, mental health received some much needed attention, including £600 million additional funding, a Better Care Fund increase and the creation of a 2% levy to be imposed by certain local authorities, but only to fund adult social care. 

The devil in the details?

While Britons can breathe a little easier in t he knowledge that the NHS will benefit from a sizeable boost in funds next year, and thus most likely avoid the feared A&E disasters this winter, the persistence of larger concerns regarding staffing, service quality and sustainability suggest optimism should be restrained. 

The Chancellor revealed a 25% cut to the Whitehall budget of the Department for Health. But rather than a simple cut to administrative costs, Nigel Edwards correctly emphasises that this will translate into a £1.5 billion cut in a single year to budgets ranging from medical training to anti-smoking initiatives and programmes to combat obesity.

The real cuts to public health are in fact even more alarming. Anita Charlesworth, Chief Economist at the Health Foundation makes it clear: "The government’s pledge to commit the extra £10bn applies only to the NHS England budget and not total health funding, which translates into £3bn less than if the increase had applied to the full health budget in 2020/21. Consequently, the wider health budget faces a real terms reduction of over 20% by 2020/21. This includes other vital areas of NHS care – junior doctor training, health visiting, sexual health and vaccinations."  She correctly concludes by noting that this is in addition to the 4% cut per year in real terms to the public health budget. At a time when clinicians deserve more training not less and preventive healthcare holds a key to a more sustainable NHS, such cutbacks seem ill-timed and counter-productive.

It seems safe staffing levels will similarly face new challenges. The spending review comes on the heels of an increasingly likely strike by junior doctors over pay and working conditions, which has overshadowed the persistent concerns over the number of nurses in the NHS. The Chancellor’s decision to remove the cap on the number of student places for nursing, midwifery and allied health subjects is a welcome one. But the cuts outlined below, in addition to the decision to replace grants with student loans, seem similarly counter-productive as students will rely on growing debt s rather than supportive grants.

Facing the future

The spending review belayed immediate fears regarding the collapse of the NHS. And admittedly money has been allocated for more long term initiatives, including another £250 million for the flagship 100,000 Genomes Project to implement genome sequencing technology within the NHS – a move welcomed by many, but also questioned by others who consider the sum inappropriate given the perilous state of the wider NHS. Some would probably express similar concerns regarding the £1 billion pledge for investment in new technology over the next five years, but they would find some solace in the fact that this pledge falls far short of the amount that the Department of Health has said is needed (£3.3 to £5.6 billion).

Osborne also reiterated the government’s commitment to finding £22 billion in efficiency savings, as well as facilitating the arguably contradictory policy of a seven-day NHS, which some have claimed is wholly unn ecessary. A more long-term concern should be the decrease in spending on public health, which implies more GP visits, hospital admissions and prescriptions. As Richard Vize concludes, “The share of our national wealth that we devote to publicly funded health will fall from 7.3% this year to an astonishingly low 6.7% by the end of the decade” . The question becomes, how much is this cut really going to cost?

Immediate disaster may have been averted for the NHS thanks to the budget increases, but the promise for a future of more personalised medicine hangs in the balance. The vision is that by providing more personalised care, and utilising new digital technologies and other innovations, the NHS can move to a new and (crucially) sustainable mode of operation. The need for such transformative change is starkly clear - so it ma kes sense to be investing large sums in digital health and genomic medicine, because without frontloading these enterprises it will not be possible to realise their potential cost-savings in the longer term. What does not make obvious sense is simultaneously cutting funds for public health initiatives at a time when more people are living longer and a growing proportion of whom are living with multiple long-term conditions.

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