Budget blues

28 March 2018 Steve Brown

Login to access this content

Chancellor Philip Hammond was completely clear ahead of March’s new spring statement. Having announced last year that there would in future only be one fiscal event each year – the November Budget –  he was not about to announce new tax or spending plans. Nevertheless many experienced health service watchers judged the lack of new funds for the care system to be a missed opportunity.

The Treasury described the point of the new statement as an opportunity to give updates on ‘the overall health of the economy’ and ‘progress made since the autumn Budget 2017’.

Mr Hammond even declared himself to be at his ‘most positively Tigger-like’ as he insisted there was ‘light at the end of the tunnel’ after a decade of austerity.

He again defended the government’s economic policy during the recession. This has focused on reducing debt because ‘we want to see taxpayers’ money funding our schools and hospitals, not wasted on debt interest’.

And from autumn 2016, this has been supplemented with a more balanced approach to repairing public finances. He pointed to ‘almost £9bn extra’ for the NHS and social care system, with £4bn going into the NHS in 2018/19 alone.

Labour’s shadow chancellor, perhaps predictably, categorised the lack of additional funding as ‘astounding complacency’ and accused the government of ignoring public services amid an unprecedented crisis.

But there were many others in and around the health service who did not share the chancellor’s optimistic viewpoint, especially given the gloomy deficit predictions unveiled in February’s quarter three figures and having seen services under significant stress over the winter.

The NHS Confederation’s chief executive, Niall Dickson, said the chancellor still faced two tasks – support the NHS and care services to deal with today’s pressures and set out a plan to ensure their long-term sustainability. He added that it was time for political courage, although he detected ‘signs within government’ that some were beginning to understand the scale of the challenge.

News later in the month of a new NHS pay deal – worth between 6.5% and 29% over three years – provides some cheer for NHS organisations.

The fact that the award will be fully funded by the Treasury – anything else would have put unmanageable further stress on the NHS – will be a relief. However, this won’t have any direct impact on the current
funding imbalance.

It is hoped that the pay award may have some indirect impact by improving morale among staff – the recent staff survey found that just 31% of staff were happy with their pay, 58% worked additional unpaid hours and 38% had felt unwell due to work-related stress over the past year.

Whether the increase is viewed as sufficient by staff remains to be seen. But anything that helps providers improve retention rates and reduce absence due to sickness is good news – and may help reduce the still-too-high agency staffing bill.

In the meantime, healthcare professionals have to stay focused on meeting current demand and driving efficiency from current budgets, while making as much progress as possible with the development of new models of care.

Representative bodies need to keep making the case for the right funding to meet demand and support transformation.

And the service must hope that in November’s Budget, ahead of the 2019 spending review, the chancellor will set out a path to a better long-term settlement for health and social care.