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Autumn Statement: government ignores the financial challenge ahead

Despite a challenging winter on the horizon, the NHS was barely mentioned in the Autumn Statement that sets out the government’s tax and spending plans for the year ahead.

The NHS Confederation warned this week that historically high jumps in demand in the past month show that the NHS is undoubtedly in for one of the hardest winters of all time.

It said that in the long-term, unless demand is tackled by all sectors and government departments then the sustainability of health and care services will be at risk.

The news came as three groups of doctors in England are still in dispute with the government over pay and elective waiting lists hit a record 7.7 million.

This is why it came as a surprise to many that the NHS was barely mentioned in the Autumn Statement announced yesterday by the Chancellor Jeremy Hunt, which sets out the government’s tax and spending plans for the year ahead.

NHS budgets set to flatline next year

New analysis from the Nuffield Trust warns that despite an additional £450m of funding being made available to the NHS earlier this month, the current financial situation  is precarious and the government is neglecting the gravity of the financial challenge ahead.

The NHS budget next year, according to the think tank, will be nearly £4bn below where it would have been if increases promised before Covid-19 continued, which will deal a blow to planning and work on the productivity improvements the government wants to see.

It said that if strike action remains off the table for the remainder of the financial year, estimates suggest the NHS could expect to save around £700m due to a reduced overtime and temporary staff bill, as well as through being able to make better progress on planned efficiency savings. That would bring the deficit for the year down to £1.7bn but savings beyond that are very uncertain and virtually impossible to achieve without real impacts on patients.

There was already a £720m financial gap at the start of this financial year due to the gap between original budgeting and projected spending for local NHS systems.

Nuffield Trust Senior Policy Analyst Sally Gainsbury said:”Without additional financial support from government, the NHS faces an uphill battle to balance its books this year without severely impacting the level and standard of care the public expect.

“Even without further strike action, the NHS is now on track to have a near £1.7bn black hole in its finances, but this could be even higher, around £2.4bn, if we see more strike action continue to the scale that we have already seen this year.

“Ultimately it is patients that feel the effects of the NHS having to tighten its belt and raiding one priority to pay for another, with efforts to tackle record waits and improve services the immediate casualty.”

Missed opportunity to get NHS back on track

Health leaders said the mini budget was a missed opportunity from the Chancellor to get the NHS back on track following the huge impact that strikes and other cost pressures have had on patient care and already-tight budgets.

Although costs so far stand at £1.7bn, only £800m has been allocated and “mainly by raiding budgets elsewhere,” which will cause long-term harm to the NHS’s ability to transform its services.

Although the plan in the Autumn Statement is to drive economic growth, they say that by downgrading the NHS as a priority, it has failed to recognise the important connection between the health of the nation and its prosperity.

Dr Layla McCay, director of policy at the NHS Confederation, added: “The NHS has been hit with this blow as waiting lists for treatment continue to rise, there is increasing long-term sickness in the community and frontline services are bracing for a very challenging winter period.

“Also, with £10.2bn worth of outstanding repairs, this figuratively provides the service with only masking tape and papier mâché to patch it up with, and a much-needed capital strategy has been kicked into the long grass.

“Also, while increasing the National Minimum Wage is a move to be welcomed, it will have an impact on the NHS, particularly in community services and primary care, which will need to see additional funding to cover these costs.”

Autumn Statement does not give patients what they deserve

Among the measures announced in the Autumn Statement was tougher requirements for those who claim working-age benefits.

Work capability assessments will be reformed “to reflect greater flexibility and availability of home-working” to help people with health conditions and disabilities find jobs. Those who do not get a job within 18 months will have to do mandatory work experience, while those who don’t look for work for a six-month period will have their claims closed. This is will include free prescriptions.

The King’s Fund said punitive steps such as removing access to free prescriptions may only risk worsening people’s health, moving them further away from employment, and may lead to people needing NHS care further down the line, potentially with a more complicated or urgent condition.

Siva Anandaciva, Chief Analyst at The King’s Fund, said it was a policy that could store up problems for the future.

He added: “An increasing number of people are living with complex long-term health conditions – impacting their quality of life, affecting demand for health and care services, and taking a toll on the economy when people are unable to work. Good-quality work can be good for people’s health, and policies such as the expansion of programmes that help people with severe mental illness to find and keep jobs are welcome.

“Today’s Autumn Statement appears to have offered nothing significant beyond the relatively small amount of additional funding for the health service recently announced, which we cannot pretend will be enough for the NHS to do everything needed to give patients the care they deserve and expect this winter. The government’s NHS funding announcements have now become caught in a vicious cycle of inefficient emergency cash injections and unrealistic expectations of what the NHS can deliver in return.

“To avoid the NHS facing a crisis every winter, ministers need to make long-term decisions that can bring demand, capacity and efficiency back into better balance.”

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