Mini-Budget leaves funding questions for NHS

In his mini-Budget today, chancellor Kwasi Kwarteng (pictured) abolished the 1.25 percentage points increase in national insurance (NI) contributions and the new health and social care levy, which was due to replace the additional NI in April 2023. The NI change will take effect in November.

In his speech to the House of Commons, the chancellor insisted he would maintain the £13bn a year the levy was expected to raise for health and social care.

The £500m discharge fund, announced by health and social care secretary Therese Coffey on 22 September, aims to improve hospital discharge into the community where patients are medically fit to leave. But it is uncertain how it will be funded. Today’s mini-Budget failed to shed more light on the question.

The Department of Health and Social Care insisted the £500m was additional funding. However, NHS Confederation said it was not clear if the funding would come from the Treasury or would have to be found from within existing NHS budgets. The expectation was that at least part of the funding would come from recycling funds given to the NHS to cover the additional cost of the rise in employers’ NI contributions.

NHS Providers welcomed the scheme to tackle delayed discharges. But interim deputy chief executive Miriam Deakin said: ‘Trust leaders will be seeking categorical reassurances that this funding will not be taken from NHS budgets, which are already severely stretched by inflation, energy costs and unfunded pay deals.’

Documents that accompanied the statement, The growth plan 2022, outlined measures to boost the sale of surplus public sector land for housing. This will give government departments greater flexibility over the reinvestment of the proceeds of sales. ‘The NHS will be given full flexibility to carry forward 100% of the proceeds from land sales into future years,’ the Treasury document said.

However, it is unclear how much more flexibility this represents over the current rules. Capital guidance published by NHS England in April said: ‘Capital proceeds will be available to the system to invest in line with the system estates strategy in the year of disposal and, in subsequent years, subject to overall prioritisation and affordability within system-level envelopes.’

The guidance only qualified this for disposals expected to deliver large sums. These will be treated on a case-by-case basis, and require discussion with NHS England and the Department of Health and Social Care, as appropriate.

The chancellor also noted in his speech that government business case approvals took too long, and he would review the process to accelerate decision-making.