‘Rocky future’ for health and social care following Budget speech

  • 24th November 2023

Critics hit out at lack of long-term vision for health and social care services following Chancellor’s Autumn Statement speech


The Chancellor’s Autumn Statement had ‘relatively little new to say’ on health and care spending, with the path ahead ‘looking decidedly rocky’, according to industry leaders.

In his budget announcement, Jeremy Hunt announced that between 2023/24 and 2024/25, under current plans, NHS England’s budget will only crawl up from £161.1bn to £162.5bn in cash terms – i.e before factoring in inflation.

And day-to-day spending is now planned to be some £3.4bn lower in 2024/25 compared to the Spring Budget 2023, according to experts at health think tank, The King’s Fund.

Improvements to health and care announced during his speech broadly fell into two categories – more support to tackle mental and physical illness to help people back into work, and investment to boost healthcare innovation.

It’s good to talk

There were new funding commitments to expand Talking Therapies – an NHS England programme to support people with mild and moderate mental health conditions – plans to expand employment support services within community mental health teams to help people gain and retain paid employment; and proposals to embed employment support within mental health and musculoskeletal services in England.

There was also a commitment to publish a health and disability White Paper.

But, alongside this increased support, there was also the hotly-debated threat to remove free prescriptions for those the government describe as ‘people who should be looking for work but aren’t’.

On boosting innovation in healthcare, the Chancellor announced a new West Yorkshire investment zone with a focus on life sciences; and £5m seed funding for a new Fleming Centre to help tackle antimicrobial resistance.

And Hunt reiterated the desire to improve the UK’s ability to support commercial clinical research trials and provided slightly more than £50m for the Our Future Health genotyping programme, as well as announcing a freeze on alcohol duty; a rise on duty rates on tobacco products; and a rise in the National Living Wage from 2024.

But what does all this mean?

The Chancellor announced plans to remove free prescriptions from those deemed able to work

A rocky road

Siva Anandaciva, chief analyst in The King’s Fund’s policy team, said: “Overall, the budget documents had relatively little new to say on health and care spending and are instead replete with references to the Autumn Statement 2022, when there were more-significant funding announcements for health and social care.

“From what I can see, the path ahead for health spending looks decidedly rocky.

“Overall health spending growth is starting to stall in real terms and higher economy-wide inflation has further eroded substantial amounts from the cash boosts awarded to health and care services in last year’s Autumn Statement – essentially, the cash announced in 2022 will not go as far.”

He added: “Public sector pay awards have a clear impact on NHS England’s spending pressures and until those are set for 2024/25 it is hard to anticipate just how large NHS England’s budget should be.

“But few would believe it is possible for the NHS to stick to its putative 2024/25 budget without significant cuts to the scope and quality of services for patients.

“And, even if the 2024/25 spending plans are untenably low, until there is something else on the table they will have to form the basis of NHS operational and financial planning for the coming year.

“So, even if these budgets are topped-up in the fullness of time, in the interim NHS leaders can expect the usual unproductive industry of submitting, revising, and resubmitting plans to begin.”

Balancing the books

And he warned that, with local authorities going bust and directors of adult social services saying they cannot meet their statutory duties, there are fears they may not be able to balance the books.

He said: “No one knows what the future course of industrial action may look like, or what its financial implications will be.

“But, by not investing more in health and care services now, the Government is taking a substantial bet that it may rue when organisations lay their accounts next year and reveal potentially large and embarrassing overspends.”

Instead, he argued, the Government needs a more-long-term approach, saying: “It is starting to feel like incoherency and a lack of strategy represent ‘path dependency’ for health and care funding announcements – where decisions for the future are constrained by the poor decisions of today and the past.

“The Chancellor said that this was ‘an Autumn Statement for a country that has turned a corner’.

“That may be true on some economic indicators, but for those involved in delivering and using health and care services, that must sound like wishful thinking.”

Hunt reiterated the desire to improve the UK’s ability to support commercial clinical research trials

The health of the nation

The lack of a clear, long-term approach was also criticised by the NHS Confederation, which represents healthcare providers across the country.

Dr Layla McCay, director of policy, said: “This Autumn Statement has been a missed opportunity from the Chancellor to get the NHS back on track following the huge impact that strikes and other cost pressures have had on patient care and already-tight budgets.

“Independent experts have said that the costs so far stand at £1.7bn, yet only £800m has been allocated and mainly by raiding budgets elsewhere, which will cause long-term harm to the NHS’s ability to transform its services.

“The Government has been clear in its messaging that this mini budget was to be a plan to drive economic growth, yet in downgrading the NHS as a priority it has failed to recognise the important connection between the health of the nation and its prosperity.

“The NHS has been hit with this blow as waiting lists for treatment continue to rise, there is increasing long-term sickness in the community, and frontline services are bracing for a very-challenging winter period.

“Also, with £10.2bn worth of outstanding repairs, this figuratively provides the service with only masking tape and papier mâché to patch it up with, and a much-needed capital strategy has been kicked into the long grass.

Papering over the cracks

“Health leaders share the Chancellor’s commitment to a productive public sector, and a productivity target of 0.5% annually is attainable, but stripping back long-term funding pots to support that transformation is counterproductive.

“Capital investment is key to unlocking productivity, so it is frustrating that this ambition has not been matched with resource.

“Also, while increasing the National Minimum Wage is a move to be welcomed, it will have an impact on the NHS, particularly in community services and primary care, which will need to see additional funding to cover these costs.”

And Nuffield Trust deputy director of policy, Natasha Curry, added: “With barely a mention for the NHS and social care in the Autumn Statement, it would seem the Government is neglecting the gravity of the financial challenge facing health and care services.

“It is welcome to see new investment in mental health services over the next five years to help more people back into work, but the NHS budget is in a precarious state, currently staring down a £1.7bn deficit.

“To plug this gap the NHS has been forced to scale back additional efforts to clear record waits and initiatives to improve patient services.

“This difficult balancing act looks set to continue.

A lack of support

“The NHS budget next year is set to flatline; it will be nearly £4bn below where it would have been if increases promised before COVID continued, which will deal a blow to planning and work on the productivity improvements the Government wants to see.”

And she criticised the lack of clear policy for social care, stating: “It is disappointing there is no sign of desperately-needed investment in the ailing social care system or progress on promised reforms such as the cap on care costs.

“The 10% rise to the national living wage will benefit a large proportion of social care staff, but with no additional funding there will be a huge impact on the ability of councils to pay already-stretched providers.

“It is hard to see how this cost can be absorbed without pushing more care organisations out of business, let alone make the improvements promised.

“This ultimately risks leaving more people unable to access the care and support they need.”

Key points:

There were no new major funding announcements for healthcare, and existing settlements will stay the same in cash terms. Instead, HM Treasury documents reaffirm recent commitments for:

• £200m of new funding announced in September 2023 to boost NHS resilience
• Funding the non-consolidated payment for 2022/23 for Agenda for Change equivalent staff
• More medical places starting in September next year to meet the NHS Long Term Workforce Plan
• The Chancellor announced a long-term cash freeze in investment spending. Alongside this, the Office for Budget Responsibility figures showed a downgrade for economic growth: 2024 has gone from 1.8% to 0.7% and 2025 from 2.5% to 1.4%
• Employee National Insurance will be cut two percentage points from 12% to 10%, with legislation being passed to introduce this from 6 January 2024
• The government will increase Universal Credit by 6.7% and the local housing allowance rate to the 30th percentile of local housing market. The state pension will also increase by 8.5% from April 2024, one of biggest-ever cash increases
• The National Living Wage will increase 9.8% to £11.44 per hour and it will be extended to 21 and 22 year olds for the first time
• The Chancellor said he wanted public sector productivity to increase by 0.5 percentage points a year. There was no further mention of the public sector productivity review, announced in the spring
• There will be increased support to help those who have mental health issues to find work, including by digitising the NHS Health Check. Building on the announcement from the Spring Budget, the government announced support for an additional 100,000 people to access Individual Placement Support over the next five years
• NHS Talking Therapies (previously IAPT) will also be expanded so an additional 384,000 people can access psychological therapies within five years. The increase in availability of NHS talking therapies should help more people access support at an earlier stage
• In life sciences, the health research programme, Our Future Health, will receive an additional £51m to support its work in identifying ways to prevent, detect, and treat diseases
• Genomics England, along with a consortium of partners, has launched a Rare Therapies Launch Pad generating evidence on whether a pathway for new therapies can be implemented in the UK for children with ultra-rare diseases
• The government has reached in-principle agreement with the pharmaceutical industry on the 2024 Voluntary Scheme for Branded Medicines Pricing, Access and Growth expected to deliver around £14bn in savings to the NHS over the next five years

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