Chancellor’s remarks prompt NHS concern

In interviews following his speech to the Conservative Party conference yesterday, Kwasi Kwarteng said he would stick to the funding allocations announced in the spending review a year ago. Those allocations were based on forecast inflation in the general economy no higher than 4% in the four years to 2026. Inflation is currently running at just below 10% and is forecast to increase to 11% in the coming months.

In the spending review, the GDP deflator – the traditional measure of public sector inflation – was forecast to be 2.2% in 2022 and 2.3% in 2023.

In May, NHS England announced it would divert £1.5bn from its central budget to support the health service with inflationary pressures that had arisen since planning assumptions were set in December 2021.

Matthew Taylor (pictured), chief executive of the NHS Confederation said that the health service was already struggling. ‘Leaders are very concerned to learn that there will be no additional funding for public services, including health, made available any time soon.

‘Inflation has already severely eroded the government’s previously allocated investment in the health service to the tune of £4bn this year, and predictions that public services need at least an extra £18bn to balance their books in the coming months mean that NHS leaders are being left to make unenviably stark choices about which healthcare services to cut back first.’

The need to reduce care, combined with the predicted harsh winter, would unfortunately lead to longer waiting lists, Mr Taylor said.

Questions also remained over where the funding would be found to finance the promised £500m adult social care discharge fund.

The government is also expected to confirm that the chancellor’s debt cutting plan, and the Office for Budget Responsibility's view on all his spending and savings measures, will be published this month and not on 23 November as originally planned. Political and economic commentators expect the plan to scale back benefits increases so they are in line with wages rather than inflation. Think-tanks, pressure groups and medical royal colleges have warned that the cost of living crisis could increase health inequalities and demand on the health service.

Extreme challenges

Mr Taylor said: ‘With such extreme financial challenges facing both NHS and social care, including a cost of living crisis hitting health service staff and patients, and with no sign of a fully funded workforce plan for the health service, the government must now truly level with the public about the service they can expect in the months ahead.’

Addressing the conference on 4 October, health and social care secretary Therese Coffey said it was now time to have an ‘honest discussion’ with the NHS – holding it to account, but also forging a partnership focused on delivery.

She praised staff. But she said backlogs were not all due to the Covid pandemic and it was now time to eradicate unwarranted variation.

Ms Coffey, who is also deputy prime minister, reiterated some of the pledges made in her plan for patients, published last month. These included additional ambulance call handlers, extra bed capacity this winter, and the £500m adult social care discharge fund.