More funding for NHS, but Budget questions remain

In today’s Budget, Philip Hammond (pictured) said an extra £335m of resource funding would be available immediately to help the NHS increase capacity over the winter. In 2018/19 he will allocate an extra £1.6bn to resource budgets, taking the overall increase in revenue to £3.75bn next year. He added that a further £900m would be given in 2019/20 to address future pressures.

It is unclear whether the funding is recurrent. In his Budget speech to the House of Commons, Mr Hammond said: ‘We recognise that the NHS is under pressure right now. I am therefore exceptionally, and outside the Spending Review process, making an additional commitment of resource funding of £2.8bn to the NHS in England.’

Overall health funding in England is now planned to be £119.1bn this financial year, £121.9bn in 2018/19 and £124.2bn in 2019/20.

The additional funds appear to be tied to improvements in efficiency and productivity – Budget papers said additional funding should allow the NHS to meet the four-hour A&E target next year, make inroads into waiting lists and improve performance against waiting times.

The government will also increase capital spending by £3.5bn, which the Budget documents said is the government’s share of the £10bn investment recommended by the Naylor review of NHS property and estates earlier this year. This is on top of the £425m announced in the Spring Budget.

The new capital funding will be divided into three lots:

• £2.6bn for sustainability and transformation partnerships (STPs) to transform and integrate care
• £700m to support turnaround at trusts facing the biggest performance challenges and to tackle urgent maintenance issues
• £200m to support efficiency programmes, such as schemes to reduce trust energy costs or to introduce technology that will allow clinicians to spend more time with patients.

 

Alongside the Budget, the government announced the provisional allocation to 12 STP schemes, using up to 10% of the £2.6bn available.

The Treasury said the capital funding should allow the NHS to increase the proceeds of sales of surplus estate to at least £3.3bn. The balance of the £10bn may well come from private finance – the Budget documents said this source of funding could be used where it provides good value for money. There will also be a review of the rules that inform trusts’ use of capital funds.

While the government has said it would lift the 1% cap on pay increases in the NHS, Mr Hammond did not set a figure. Instead, he said the Department and NHS unions had initiated discussions on a new pay deal for Agenda for Change staff. He pledged to fund any deal on condition that it improved productivity and was justified on the grounds of recruitment and retention.

‘I want to assure NHS staff and patients, that if the health secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement,’ he said.

The Budget also promised a green paper next month that will set out plans to transform children and young people’s mental health services and pledge a further £42m for the disabled facilities grant.

The chancellor does not directly allocate funding to health services in the devolved nations. But he said that as a consequence of the decisions made in his Budget, their overall budgets would increase. The Scottish government would receive an additional £2bn, the Welsh government £1.2bn and Northern Ireland £650m.

NHS Providers said the chancellor had given the NHS less than needed, but more than expected. Its chief executive Chris Hopson said: ‘Any extra investment in the NHS is welcome given the overall economic context and the other demands on public expenditure. It is a clear signal that the government has listened to the NHS’s definitive statement that the existing spending review plans for 2018/19 were undeliverable.

‘However it is disappointing that the government has not been able to give the NHS all that it needed to deal with rising demand, fully recover performance targets, consistently maintain high quality patient care and meet the NHS’s capital requirements. We also note that the extra revenue has been tied to acute hospital performance at a point when the pressures across the rest of the health service – community, mental health and ambulance services – are just as great.’