Short term protection but long term problems

November 18, 2022  

Laura Charlesworth unpacks what the Autumn Statement means for a health and care system in crisis.

Speaking earlier this week, Prime Minister Rishi Sunak confirmed that the NHS will be protected from further austerity, so we didn’t expect to hear much directly related to health in yesterday’s Autumn Statement. Perhaps surprisingly, Jeremy Hunt announced an increase in NHS spending of 3.3bn in 2023-2024 and 3.3bn in 2024-2025, declaring his desire for “Scandinavian quality and Singaporean efficiency”.

To many, this appears as good news – cuts to a system at breaking point would have been catastrophic, but does this mean in real terms for a health and care system in crisis?

The NHS is protected but the impact of rising inflation will leave a much greater hole in NHS finances than previously predicted. NHS England estimates a £7bn deficit in the next financial year, with a 3.3bn spending rise this might go some way to tackling the inflation deficit. But with rising demand and a huge backlog, this still calls for some challenging conversations with NHS leaders and Ministers if we are to avoid cuts to critical health and care services, further declining NHS estate and ongoing reduction in staff morale. The latter is starkly illustrated by the recently announced strike action from the Royal College of Nursing.

We are facing an immediate workforce crisis, not resolved through yesterday’s announcement of a workforce plan for the next 5, 10 and 15 years.

The Prime Minister and Health Secretary have demanded further improvements from NHS providers, focused on tackling waste and creating efficiencies. The need for this is evident and colleagues working on the front line want these improvements more than anyone. But without further action to counteract the impact of soaring inflation and energy costs, we are likely to see increased waiting times, lower standards of care and an ongoing void in the NHS workforce. This week, the NHS waiting list was reported to be at 7.1 million, 60% higher than before the pandemic.

The NHS is protected but the chronic underfunding of social care continues to create increasing pressures.

Without appropriate post discharge care, one in three hospital beds are unnecessarily occupied. Failure to appropriately fund social care impacts significantly on NHS demand and capacity. Currently 43p in every £1 of council funding is spent on Adult Social Care, an increase from 39p in 2012-2013. There are difficult choices to be made – councils seeking to plug the social care funding gap will be unable to fund other vital local services that support our communities to thrive.

A substantial investment is required to overcome a decade of underfunding to social care. In its 2020 report, the Health and Social Care Committee, ironically chaired at the time by Jeremy Hunt, said an additional £7bn per year was required by 2023/24 as a starting point. Yesterday’s announcement of an extra 2.8bn in 2023-2024 and 4.7bn in 2024-2025, partly funded by expected council tax increases, will not come near to meeting the need.  

The NHS is protected but by 2024-2025 inflation will squeeze unprotected departmental budgets by between £5bn and £15bn according to the OBR – these cuts to public services will continue to impact the wider determinants of health. We have already identified that Council Tax will increase, social care remains underfunded, and councils are still facing a real terms reduction in budgets due to inflation and rises to the national minimum wage. This will impact on vital services which touch many aspects of our daily lives.

Factors such as education, employment, housing, access to green spaces, active travel and air pollution can all result in unequal health outcomes, such as premature mortality and reduced years of healthy, good quality life. Cutting funding for public services, will impact on these wider determinants and cause increasing demand for NHS services.

A substantial investment is required to overcome a decade of underfunding to social care.

The NHS is protected but Pension Tax and public sector pay will mean more staff leaving the workforce and declining morale. We are facing an immediate workforce crisis, not resolved through yesterday’s announcement of a workforce plan for the next 5, 10 and 15 years. NHS Trusts are holding vacant posts to reduce costs, nurses have voted to strike and the vacancy rate in adult social care is the highest since records began – 10.7%.

With pay awards limited to 2% for 2023/24, further frustration is likely amongst health and care workers with potential for more industrial action. There was an absence of the expected announcement yesterday regarding a further two-year freeze on the lifetime allowance of pension savings. However, The BMA has estimated that if inflation remains above 5% until 2027, full time GPs will hit the threshold in their early 50s, leading to growing numbers leaving the workforce for early retirement.

The NHS is in crisis on multiple fronts. Indicating protection for the NHS in this budget, while failing to address the factors that are putting it under strain, amounts to inaction and simply leaves the system facing further decline.

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