Rachel Reeves leaves Downing Street to deliver her Spring Statement. Image, Alecsandra Dragoi/Treasury

Care home operators face losing their businesses and NHS patients will continue to face lengthy delays for treatment, critics warn following Chancellor, Rachel Reeves’ Spring Statement announcement yesterday.

In her speech, Reeves provided an update on the economy and confirmed there would be no major tax changes.

But she announced major welfare reforms and plans to further boost house building, as well as reiterating a target to reduce the administrative costs of government departments by 15% by 2030.

In the last week this has led to the announcement of the abolition of NHS England, the work of which will now be absorbed into the Department of Health and Social Care to avoid duplication.

While health and social care services were not directly mentioned in her speech this week, operators and market experts said the Government’s figures mean the day-to-day health budget for next year will grow by less than 2% in real terms after taking into account the impact of National Insurance increases. This compares to a long-term average of nearer 3%.

Over the last decade and a half, successive governments have repeated the same mistake of underestimating the level of funding growth required to keep up with growing patient needs and expectations, resulting in chaotic last-minute top ups to the budget

And, with the recently-announced abolition of NHS England, the pressure will remain on the front line, critics fear.

Sally Gainsbury, senior policy analyst at health think tank, the Nuffield Trust, said: “The Government has highlighted opportunities for savings made to central administration costs to be reinvested into the frontline, such as through dismantling NHS England.

“It’s absolutely right to drive down duplication and waste when the health service is under such pressure. But these savings are unlikely to deliver anything like the boost to funding needed to keep up with population demand.

“Over the last decade and a half, successive governments have repeated the same mistake of underestimating the level of funding growth required to keep up with growing patient needs and expectations, resulting in chaotic last-minute top ups to the budget.

“This has already happened for the budget for the current financial year, which had to be supplemented with an extra £800m for the NHS just four months after the Chancellor’s autumn statement.”

And she claimed adult social care services had been ‘hung out to dry’, telling Healthcare Property: “Today’s statement confirms the absence of funding to cover extra costs, which we estimate will amount to £2.8bn from Employer National Insurance Contributions and minimum wage increases for care providers.

“This will likely lead to many providers going bust or reducing services, meaning people will suffer from less choice or poorer-quality care.

“The Government has promised long-term reform of adult social care with the upcoming Casey Commission.

“The newly-announced Transformation Fund offers billions of extra funding for reforming public services, but it’s unclear whether any of this will be used for desperately-needed changes to adult social care.

“Today’s worrying financial outlook risks jeopardising the sector before Baroness Casey’s feet are even under the table.”

This will likely lead to many providers going bust or reducing services, meaning people will suffer from less choice or poorer-quality care

Matthew Taylor, chief executive of the NHS Confederation, added that the approach failed to look at the long-term recovery of health and care services.

He said: “The Government has had to make some very-difficult decisions due to the precarious state of public finances.

“We understand the need to stabilise public finances in the short-term and that this will require cost-cutting measures across government departments as well as the NHS. But the abolition of NHS England, and proposed running cost cuts to integrated care boards are coming at a very-challenging time, with services struggling to recover performance and begin to work towards the Government’s three shifts.

“The reality is that these cuts will require major changes and they will inevitably make the task of delivering long-term transformation of the NHS much harder.

“Much of trust and ICS leaders’ focus will need to go on stabilising the NHS in the short term as they prioritise patient care, but we also need to ensure we get the right balance between recovery and reform given the opportunity provided by the upcoming 10-year plan.

“The danger is that we go too far and leave little to no capacity to deliver this long-term transformation.”

And he called for greater capital funding to underpin an upsurge in activity.

“Our members have told us that capital funding is going to be vital for improving productivity and cutting waiting lists,” he said.

Developers have been waiting on the sidelines, and if confidence returns, we could see a surge in project starts

“Our recent discussion paper concluded that ministers are likely to need several options to raise capital, including shared investment models with private capital.

“Private finance could free up public capital to concentrate on tackling the urgent repairs needed to drive down the NHS’s £13.8bn maintenance backlog.”

Allan Wilen, economic director at construction market data analyst, Glenigan, added: “The Spring Statement is hardly a game-changer for construction, but no news is good news.

“Developers have been waiting on the sidelines, and if confidence returns, we could see a surge in project starts.

“Glenigan data shows that £129bn worth of projects have secured planning approval over the past year, and many of these schemes could now break ground.”