NHS needs £10bn boost in spending review

The estimate of what is needed is on top of the costs of delivering the government’s 40 hospital building programme, reforming social care, delivering Test and Trace and Covid vaccination and the funds needed for staff training.

Chris Hopson (pictured), chief executive of NHS Providers said the government had acknowledged the need to ‘live with Covid’. ‘That means they must fully recognise the extent, length and cost of the impact of Covid-19 on the NHS,’ he said.

Matthew Taylor (pictured below), chief executive of the NHS Confederation said that anything short of £10bn could force cuts in services. ‘[Trust leaders] are worried that, despite the best efforts at the frontline, the 13 million waiting list they are desperate to avoid will become inevitable. And this backlog will take five to seven, not two to three years to clear.’ (Health secretary Sajid Javid warned in July that waiting lists could more than double from the 5.3 million level at the time.)

A reckoning: the continuing cost of Covid-19 draws on a survey of 116 trusts – more than half of the provider sector – to make a case for increased funding in this autumn’s spending review. It estimates extra Covid-19 costs at £4.6bn, while care backlogs will cost between £3.5bn and £4.5bn for each of the next three financial years. The fact that trusts have been unable to make the annual 1.1% efficiency savings assumed in the existing five-year budget will add a further £1.5bn to baseline costs.

Trusts have listed a number of drivers behind the increased Covid-19 costs, with infection prevention and control high on the list. Increased cleaning costs, site security and waste disposal was adding £400,000 a month to once trust’s costs above its contract value. More than half of the trusts surveyed expect these costs will continue to be incurred until at least 2024/25.

Staff absence because of illness, isolation requirements or caring responsibilities is also increasing agency and bank costs – a pressure that more than nearly half of the trusts thought could last until the end of 2022/23.

Some services have also expanded to cope with increased demand, which can lead to costs such as moving services off site and monitoring patients at home. Long-Covid has cost implications and there are also additional costs not related to clearing the backlog, such as making progress with NHS long-term plan requirements such as tackling out-of-area placements. Some trusts have also seen additional income streams dry up and extra costs associated with supporting staff well-being and administering a larger waiting list.

On average, the organisations surveyed estimated the additional costs would represent nearly 4.6% of their 2019/20 baselines – although this ranged from under 3% for combined mental health and community trusts to nearly 7% for ambulance trusts.

The report also underlines that the service was already under pressure as the pandemic started. It had faced the longest financial squeeze in its history between 2010 and 2019. And the five-year funding settlement in 2018 was only enough to keep pace with increasing demand, not to recover performance levels or deliver transformative change. The settlement also excluded funding for health education, public health, social care and capital spending.

The costs of treating Covid patients in 2020/21 totalled £7.8bn, according to an NHS England and NHS Improvement board paper, although additional costs have reduced since the most intense phases of the pandemic.

In a joint statement, Mr Hopson and Mr Taylor insisted that health outcomes for millions of patients over the next three years were dependent on the crucial decision about funding. ‘Patients genuinely are at peril,’ they said. ‘The government has to demonstrate that the NHS is safe in its hands. Frontline NHS leaders cannot stand idly by if they are forced to cut services, putting patients at risk.’