A budget for [asset-stripping and forcing savings from] the NHS
The 2018 budget drew headlines on the "extra" money for the NHS, and especially for mental health (while most other areas of government spending face substantial cutbacks) and the announcement that no further new PFI projects will be signed off by the Treasury.
Less attention has been paid to the detail of the budget, notably the commitment to raising a massive £3.3 billion from the sale of “surplus“ land and buildings.
Also contained in the full wording is the warning that funding for NHS pensions is only guaranteed until 2023-4.
Philip Hammond claimed the cash settlement for the NHS to 2023-4 represents an average real growth rate of 3.4% - 3% when cuts or frozen funding for other parts of health spending (public health, capital costs, education and training etc.) are included.
This is a further underfunding annually well below the pre-2010 average of 4%. It therefore offers no real relief from the relentless austerity for the past [nine years? if we are going to March 2019] eight years.
However the 3.4% figure has already been widely discredited by the analysis of almost every knowledgeable commentator.
Labour’s Jonathan Ashworth, the BBC and the Health Foundation note that even after the budget, the NHS faces a cut of £1 billion next year, and that funding for public health and the training of doctors and nurses is also set to fall next year.
The Nuffield Trust’s Sally Gainsbury argues that the total budget for DH will increase by just 2.7% real terms in 2019/20.
The Royal College of Psychiatrists, while welcoming the positive rhetoric about increased funding for mental health notes that the extra £2 billion over 5 years is well short of the amount needed to increase its share of NHS spending – and actually represents a further reduction:
“The focus on younger people and crisis services is welcome, but this mustn’t be at the expense of the vital community mental health services which treat so many people with mental illness.”
New figures for numbers of school nurses who are also key to preventive action on children’s mental health shows a brutal 24.7% cut since the service was transferred to local government in 2010.
The Labour group on the Local Government Association points out that the extra cash for social care is also a deception :
“Don't be fooled by the Chancellor's claim of an extra £650m for adult social care - they're also making a £1.3bn CUT to council budgets next year. So overall they're still actually CUTTING £650m! ”
To make matters worse the budget goes on to spell out the requirements of NHS England’s long term plan, which include restoring NHS providers to financial balance – which means cuts to wipe out £billions in deficits, not to mention £12 billion cumulative backlog of deficits that live on as loans.
Trusts must also deliver “cash-releasing” efficiency gains of 1.1% a year, despite the fact that the extra money just allocated does not even compensate for 4% annual cost pressures.
This is a further formula for intensified pressure on all sections of trust staff, and cutbacks in services to deliver cash savings regardless of consequences.
To quote a memorable statement by Theresa May : “Nothing has changed ”. The austerity squeeze on the NHS and the drive to asset strip and cut back services is unrelenting.
Extracts on the NHS from the October 2018 Budget (with emphasis added).
[…] “In the run-up to Spending Review 2019, the BSR [Balance Sheet Review] is similarly looking at how to improve the management of departments’ individual balance sheets.
For example, the NHS will be generating a £3.3 billion increase in proceeds from selling surplus land and buildings, almost doubling the scale of the investment available to the NHS.
DHSC will also publish a cross-government strategy for managing the rising cost of the government’s almost £72 billion of clinical negligence liabilities.“
2.21 Public service pensions
Public service pensions were reformed in 2015 and, as part of those reforms, an agreement was reached to maintain their value. Valuations of public service pensions are ongoing, and provisional results indicate that changes will need to be made from 2019-20 to make pension benefits more generous for public servants, including teachers, police, armed forces and NHS staff.
The Budget confirms a reduction of the discount rate for calculating employer contributions in unfunded public service pension schemes, to 2.4% plus CPI (in line with established methodology to reflect OBR forecasts for long-term GDP growth). The valuations indicate that there will be additional costs to employers in providing public service pensions over the long-term.
The government is supporting departments to ensure that recognition of these costs does not jeopardise the delivery of frontline public services or put undue pressure on public employers. For the NHS, as outlined in the five-year health settlement in England in June 2018, the Treasury has made provision for NHS pension costs only until 2023-24.
[...] The Spending Review next year will settle the funding for costs beyond 2019-20 arising from the valuations.
6.2 The NHS
NHS funding – The NHS is the government’s number one spending priority. In June, the government set out an unprecedented multi-year funding plan, with associated cash budgets, for the NHS in England.
At that time this equated to £20.5 billion more a year in real terms by 2023-24, an average real growth rate in the NHS’s budget of 3.4% a year; taking the NHS budget from £114.6 billion in 2018-19 to £147.8 billion in 2023-24, with a total UK-wide scorecard cost of £83.6 billion.
The NHS agreed to come forward with a new long-term plan this year, to be agreed with the government. The cash settlement that the government promised in June 2018 is fully funded at this Budget.
The NHS will deliver its plan by the end of the year, and the government will confirm the final settlement consistent with that plan, and the £20.5 billion real terms increase by 2023-24, by Spending Review 2019. (1)
This settlement will enable the NHS to plan for its future and support it to deliver the world-class care that people want and expect. It is essential that every pound in the NHS is spent wisely. The government has set five financial tests for the NHS to meet in producing the plan, to ensure that it does its part in putting the health service onto a more sustainable footing. The plan must set out how:
· the NHS (including providers) will return to financial balance
· the NHS will achieve cash-releasing productivity growth of at least 1.1% a year (with a final number to be confirmed in the plan), with all savings reinvested in frontline care
· the NHS will reduce the growth in demand for care through better integration and prevention (with a final number to be confirmed in the plan)
· the NHS will reduce variation across the health system, improving providers’ financial and operational performance
· the NHS will make better use of capital investment and its existing assets to drive transformation
As also set out in June 2018, the government will consider proposals from the NHS for a multi-year capital plan to support transformation, and a multi-year funding plan for clinical training places.
The government will also ensure that public health services help people live longer healthier lives. Budgets in these areas will be confirmed at Spending Review 2019.
Mental health funding – The government is committed to achieving parity of esteem between mental health and physical health services, ensuring that high quality mental health support is available for those that need it, in appropriate, safe settings. Funding for mental health services will grow as a share of the overall NHS budget over the next 5 years.
These services will take pressure off Accident and Emergency (A&E) departments and other public services such as the police, probation and social services. They will also ensure that people with mental illness can return to, and stay in, work, boosting employment and productivity.
The NHS will invest up to £250 million a year by 2023-24 into new crisis services, including: 24/7 support via NHS 111; children and young people’s crisis teams in every part of the country; comprehensive mental health support in every major A&E by 2023-24; more mental health specialist ambulances; and more community services such as crisis cafes.
The NHS will also prioritise services for children and young people, with schools-based mental health support teams and specialist crisis teams for young people across the country. For adults, the NHS will expand access to the Individual Placement Support programme to help those with severe mental illness find and retain employment, benefitting 55,000 people by 2023-24.
Support for air ambulance trusts – Our air ambulance services work tirelessly 24 hours a day, 365 days a year to get those with life-threatening illnesses and injuries to the expert medical care they need. The government is making available £10 million of capital funding in England to back them in this work.
Additional social care funding – In the short term, the Budget provides an additional £240 million in 2018-19 and £240 million in 2019-20 for adult social care. This will make sure people can leave hospital when they are ready, into a care setting that best meets their needs. This will help the NHS to free up the beds it needs over winter.
The Budget provides a further £410 million in 2019-20 for adults and children’s social care. Where necessary, local councils should use this funding to ensure that adult social care pressures do not create additional demand on the NHS. Local councils can also use it to improve their social care offer for older people, people with disabilities and children.
The Budget provides councils with an additional £55 million in 2018-19 for the Disabled Facilities Grant to provide home aids and adaptations for disabled children and adults on low incomes.
Children’s social care improvement – The Budget provides £84 million over 5 years for up to 20 local authorities, to help more children to stay at home safely with their families. This investment builds on the lessons learned from successful innovation programmes in Hertfordshire, Leeds and North Yorkshire.
See also the KONP analysis (link below)
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