Autumn budget: £4 billion needed next year to stop NHS care deteriorating

The government must find at least £4 billion more for the NHS in the Budget to stop patient care deteriorating next year, three leading health charities warn today.

New analysis in a briefing from the Health Foundation, The King’s Fund and the Nuffield Trust shows that current spending plans fall well short of what the NHS needs based on an assessment of Office of Budget Responsibility (OBR) projections and historic rates of funding growth. Based on the government’s current spending plans, the analysis estimates there will be a funding gap of at least £20 billion by 2022/23.

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The briefing underlines that 2018/19 will be a crunch year for the NHS, with funding per person projected to fall by 0.3 per cent. With NHS funding growth falling to the lowest rate in this parliament and one of the lowest in NHS history, the three organisations say that the minimum requirements for the government to meet its manifesto commitments in the Budget are to:

• Deliver on its pledge to increase NHS spending in real terms for every year of the parliament;
• Make an immediate, substantial down-payment on its promise to increase NHS funding by £8 billion by the end of the parliament;
• Ensure that any increase in pay for NHS staff is fully funded, rather than being met from within the existing NHS funding settlement;
• Outline a plan for meeting its election commitment to provide an extra £10 billion in capital investment to carry out essential repairs and improve deteriorating facilities.

The organisations warn, however, that these actions would not be enough to close the estimated funding gap by 2022/23, despite NHS productivity improving at a faster rate than the wider economy. Unless spending starts to rise to match the demands facing the service – an increase of at least £4 billion in 2018/19 - the three organisations warn that patients will wait longer for treatment, more services will be rationed and quality of care will deteriorate.

With the social care system on the brink of crisis, the briefing argues that the need for reform remains as urgent as when the Prime Minister made the case for it during the election campaign. New analysis estimates that the sector will face a funding gap of £2.5 billion by 2019/20, raising the prospect of thousands more older and disabled people being denied access to care. It calls on the government to use the Budget to commit to fundamental reform and to publish costed funding options when it launches its forthcoming consultation on social care.

The briefing argues that reductions in public health budgets are a false economy that are resulting in cuts to key services and storing up problems for the future. It calls on the government to use the Budget to reverse further planned cuts to public health budgets.

The three organisations also argue that a new independent body should be established – modelled on the OBR – to assess long term health and care spending in place of the short-termism that has plagued NHS and social care funding decisions.

Chris Ham, Chief Executive of The King’s Fund, said: ‘After seven years of austerity, the dramatic improvements made in health care over the last 20 years are at risk of slipping away. The message is clear - unless the government finds the money the NHS and social care need, patients, service-users and their families will suffer the consequences.’

Nigel Edwards, Chief Executive at the Nuffield Trust, said: ‘Despite having become ever more efficient, the NHS faces a huge underlying financial gap set to grow every year unless something changes. The problem simply isn’t going to go away with one-off bungs or bailouts and is driving hospitals into deficit and causing patients to wait longer and longer for treatment. The Government must face facts and commit to sustainable increases over the lifetime of this parliament.'

Jennifer Dixon, Chief Executive of the Health Foundation, said: ‘Public opinion consistently shows, through polling and voting, that the NHS is a top priority issue facing Britain. Without proper investment now the NHS will slip well below the standards and outcomes of health care provided by our European neighbours. This is entirely avoidable. An extra £4 billion in 2018/19 would simply be a return to the average increases of the first 63 years of the NHS’s history. The additional funding required is not exceptional, it is the last 7 years of austerity that are the exception.’

Notes to editors

1. Based on projections from the OBR, we estimate that NHS spending would need to rise from £123.8 billion in 2017/18 to at least £153 billion in 2022/23 (a 4.3 per cent average annual increase ) to keep pace with demographic pressures and increasing costs.
2. On current plans, NHS funding growth slows to just 0.4 per cent in 2018/19.
3. If NHS staff pay were to rise with inflation (as measured by the Consumer Price Index), this would mean finding at least an additional £600 million in 2018/19.
4. During the General Election campaign, the Prime Minister committed to implementing the Naylor report on NHS property and estates estimated that the NHS will need at least £10 billion in additional capital investment, at least £7 billion of which would come from the public purse.
5. NHS productivity is improving by 1.7 per cent a year.
6. The Spending Review 2015 announced reductions in public health funding of nearly 4 per cent a year, a real terms cut in spending of at least £600 million a year by 2020/21, on top of £200 million already cut from public health budgets in 2015/16.

About Us

• The Health Foundation is an independent charity committed to bringing about better health and health care for people in the UK. Our aim is a healthier population, supported by high quality health care that can be equitably accessed. We learn what works to make people’s lives healthier and improve the health care system. From giving grants to those working at the front line to carrying out research and policy analysis, we shine a light on how to make successful change happen.
• Nuffield Trust is an independent think tank. We aim to improve the quality of health care in the UK by providing evidence-based research and policy analysis and informing and generating debate.
• The King’s Fund is an independent charity working to improve health and health care in England. We help to shape policy and practice through research and analysis; develop individuals, teams and organisations; promote understanding of the health and social care system; and bring people together to learn, share knowledge and debate. Our vision is that the best possible care is available to all.