21.03.13
Budget will ‘increase pressure on the NHS’
The Government is committed to its financial strategy, Chancellor George Osborne reiterated in his fourth Budget yesterday. NHS organisations have welcomed the continued protection of the health budget, but warn the extension of the cap on public sector pay by another year could have grave consequences.
He admitted that work to cut the deficit was taking longer than expected, with growth of just 0.6% expected for 2013, down from 1.3% predicted in his Autumn Statement.
Osborne said: “We are, slowly but surely, fixing our country's economic problems”.
The UK’s national debt will rise to 85% of GDP and not start decreasing until 2017/18 now – two years later than originally planned.
The Chancellor told MPs: “This is a Budget that doesn't duck our nation's problems. It confronts them head on. It is a Budget for an aspiration nation.”
It was a “fiscally neutral” budget – not offering any unfunded tax giveaways. Osborne added that the deficit reduction plan was “on course…we will not waiver from it”.
Corporation tax has been cut to 20%, the petrol rise planned for the autumn has been scrapped and beer duty has been cut by 1p per pint. The flat rate state pension will be brought forward from 2017 to 2016.
The Help to Buy scheme will be extended, enabling 75,000 people to buy homes through lower deposits, shared equity loans and mortgage guarantees. A 1% public sector pay cap will be extended by another year until 2015/16.
Osborne also brought forward the introduction of £10,000 income tax threshold to 2014, and announced £2.5bn of spending on infrastructure, to be paid for by an additional squeeze on public spending.
The Bank of England Monetary Policy Committee has been given an updated broader remit, but retains its 2% inflation target.
Dr Peter Carter, chief executive & general secretary of the RCN said: “Yet again hard-working nurses will not find much cause for celebration in this year’s budget.
“We know that nursing staff are already struggling to keep their heads above water financially as their pay falls further and further behind the rate of inflation. The news that public sector pay will continue to be capped at 1% until 2016 means yet more financial difficulty for the UK's nurses. This also continues to undermine the principle of an independent pay review body.
“With falling staffing levels, declining staff morale and rising demand it has never been more challenging to work in the health service and we must make sure that this challenge is properly rewarded.”
NHS Confederation chief executive Mike Farrar welcomed the decision to protect the health service budget but added that “many aspects of today's Budget are likely to increase pressure on the NHS. If demands on local authorities produce a reduction in the services which help people maintain an independent healthy lifestyle, more people will end up in crisis, either needing health care in an emergency or having already passed the point where they can be helped to regain their health and independence.
“That isn't good for the sustainability of the NHS, but it is even worse for the individuals affected and their families. And while we welcome the decision to bring forward implementation of social care funding reforms, 2016 is still three years away. Immediate action to prevent the wheels falling off is needed now, in addition to radical reform in the future.”
Dean Royles, chief executive of NHS Employers, said: “Even limited to 1%, the public sector pay increase announced by George Osborne this afternoon will add in the region of £500 million to NHS annual expenditure when applied across all NHS staff. This is the equivalent of around 15,000 new nurses.
“Despite a headline pay freeze, most NHS staff have been receiving incremental pay increases of around three per cent as they climb up through their pay bands. The salary rise announced by the Government last week and confirmed in today's Budget is in addition to these increases. Employers want to do everything they can to support staff and build morale, and I know that pay is a big factor in this, but our biggest priorities must be maintaining and improving quality patient care and staff job security, both of which depend on sustainable pay bills.
“We need to engage with our staff and unions to explore how we can come out of a period of pay restraint in a sustainable way, recognising the significant contribution of our staff to delivering high quality patient care. This has to be better than waiting for annual announcements around public sector pay policy.”
Lord Victor Adebowale, chief executive of Turning Point and a member of NHE’s editorial board, said: “Whilst the Chancellor’s reiteration of his intention to implement the recommendations from the Dilnot report is good to hear, as ever, the words need to be acted on to ensure that those who need help with social care get the support they need.
“The cap on care costs has been set much higher than Dilnot's original recommendations and for many people who are already struggling to get by, the Chancellor’s commitment to implementing this by 2016 seems a lifetime away.
“The Chancellor’s focus on the ‘bloated welfare system’ is also worrying; the Government must continue to provide the right level of support to those who need it most.”
(Image: AP Photo/Kirsty Wigglesworth)
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