09.07.15
Clarity needed over £8bn NHS spending boost
The chancellor has stated that the NHS is the government’s ‘priority’ as he confirmed the health service will receive £8bn more in annual funding by 2020-21.
During his Summer Budget 2015, George Osborne said the government will fully fund the NHS’s self-produced Five Year Forward View – a pledge the Conservatives made in the run up to this year’s General Election.
The Budget documents revealed that the NHS will receive “staged funding” increases in every year of the Parliament. But the specific level of funding for each year will not be determined until the autumn Spending Review.
However, the health industry has stated that there is an “urgent need for clarity” on how the funding will be deployed.
Rob Webster, chief executive of the NHS Confederation, said that he welcomed the formal commitment on increasing NHS funding by £8bn by 2020-21, on top of the £2bn delivered in this year’s budget.
“The £8bn needs to come in staged increases and we would emphasise this should reflect the bigger cost pressures expected in the first half of this Parliament,” he said.
“There is an opportunity for a multi-year funding deal to be aligned with planning in the NHS, for example around pricing, contracting and allocations. Through NHS Employers, we will look at the impact of the budget on our workforce. The additional funding will also need to account for investment in transformation, to support double-running and other costs that will be needed to move to new models of care.”
The Treasury reiterated that while funding the five-year plan, which includes ensuring the NHS becomes a seven-day service, the health service will also need to deliver £22m in efficiency savings.
Osborne said: “That plan requires very challenging efficiency savings across the health service – which must be found. But it also requires additional government funding.”
The Healthcare Financial Management Association (HFMA), which revealed recently that almost two-thirds of NHS finance directors are forecasting a deficit for the end of this financial year, stated that in order to deliver the wide-scale changes the funding should be front rather than back loaded or we “risk a further deterioration in the state of NHS Finances”.
Paul Briddock, director of policy at HFMA, said the budget highlights the urgent need for clarity on how and when the £8bn of funding promised by the government will be deployed.
“Finance directors have ambitious plans to save through improving efficiency, from procurement savings to supporting staff to work in different ways. While this will help protect and maintain services, we can’t rely on these measures alone to plug the remaining £22bn gap in NHS finances,” he added.
NHS Providers has also called on the government to establish three things:
- A clear funding profile for the NHS between 2015-16 and 2020-21;
- Commit to multi-year funding allocations and use of the payment system to enable confidence in investment and better value for money;
- And give assurance that the NHS will receive the funding that has been pledged in full, alongside stable social care funding.
Saffron Cordery, director of policy and strategy at NHS Providers, said: “This Budget comes at a crucial juncture for NHS providers. With high levels of financial pressures on the NHS, we need a clear five year financial plan to match the five year forward view.
“There is a need to stabilise both performance and finances, and to pursue a realistic goal based on what the NHS is actually capable of achieving over the next five years.”
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