Research conducted by the Liberal Democrats indicates that the Chancellor of the Exchequer, George Osborne, made massive cuts to the NHS in his budget, despite proclaiming the opposite.
The so-called secret cuts where effectively contained within the small print of the document, with the Liberal Democrats accusing the Chancellor of shaving £650 million from the overall NHS budget.
Commenting on the issue, the leader of the Liberal Democrats, Tim Farron, took a very severe tone, suggesting that Osborne was simply attempting to “pull the wool over people’s eyes”.
“Even by George Osborne’s standards, this is a vicious attack on our health service, schools and public services,” Farron commented. “He made grand promises about funding the NHS and is now making secret cuts by the back door. David Cameron said he would do whatever it takes to fill the NHS black hole, and we’ve now discovered that actually means cutting £650 million just to help the Chancellor’s budget-day balance sheet.”
The Chancellor announced that he would change the so-called “discount rate” for the pensions, meaning central government will pay less but front line employers will pay more.
A total of £1 billion is likely to be taken from health and education combined by the changes.
Responding to this, the aforementioned Farron suggested that Osbourne is guilty of deliberately misleading people.
“George Osborne cannot pull the wool over people’s eyes. Choosing to ask schools, hospitals, and forces to pay £2 billion extra in pension contributions has a real cost, and vital services will have to pick up the bill. The Conservatives simply cannot be trusted to protect the services communities rely on up and down the country.”
It is notable that the Chancellor largely neglected the subject of the NHS in his recent budget speech.
Indeed, only two fleeting references were made to the health service in the entire text.
And the apparent plans of the government must be placed in the context of the health service as a whole.
Even the government’s own official figures indicate that all but one NHS region was in deficit during 2014/5.
To put this figure into context, every single region had a financial surplus just two years ago.
“The country will be spending no more than the country raises in taxes. We are achieving this while at the same time increasing resources for our NHS and schools, building new infrastructure and increasing our security at home and abroad,” Osborne Has commented in the budget.
A spokesperson on the behalf of the Treasury defended the government’s plan for the NHS, suggesting that it was indicative of fiscal responsibility.
“We’re committed to regular revaluation to ensure public sector pension costs are met. The Budget announcement means employers have three years to prepare and we think they should be well placed to absorb extra cost of contributions – especially because inflationary pressures are significantly lower than expected when budgets were set at spending review.”
Chancellor of the Exchequer George Osborne has announced that front line services in the NHS will receive a investment of nearly £4 billion.
The announcement from the government can be placed in the context of growing fears about pressures on the health service.
To be precise, front line services will receive a direct cash injection of £3.8 billion, which is considered to be an above-inflation rate figure.
The funding boost represents a rise of nearly 4 percent on NHS England’s £101 billion front line budget this year.
This can be seen as a precursor to the Autumn Statement, which is scheduled for tomorrow.
However, the Treasury has indicated that this rise will form apart of the overall manifesto promise to provide the NHS with additional funding of £8 billion by the end of the decade.
It is not clear yet whether this £8 billion figure will be adjusted following the cash injection, or whether Osborne still intends to continue with the manifesto plan.
The decision to inject cash into the NHS can be placed in the context of a somewhat failing health service.
NHS trusts are heading for a deficit of more than £2 billion this year as they fight to keep control of costs.
And reports have indicated that occupancy levels throughout the health service are already extremely serious ahead of the anticipated winter surge.
The rise will bring spending to £106.5 billion in 2016-17, which is the equivalent of a 3.7 percent or £3.8bn rise once inflation is taken into account.
Details about precisely how the money will be spent have not been released yet. It will be interesting to see whether this will form part of the statement to be released by the government tomorrow.
Speaking ahead of the Autumn Statement, Chancellor of the Exchequer Osborne claimed that this new funding would cement the future of the NHS.
“This will mean world-class treatment for millions more patients, deliver a truly seven-day health service and allow the NHS to implement its five-year plan to transform the services patients receive,” Osborne stated.
But Anita Charlesworth, of the Health Foundation think tank, was concerned about what had yet to be announced by the government.
“Any move to redefine and shrink the definition of the NHS would be particularly worrying. If some of the new money comes from other parts of the health service – such as public health or training – it would be a false economy.”
Labour shadow health secretary Heidi Alexander echoed this view.
“If new investment in the NHS is to be funded by raiding budgets for nurse training, public health and social care, then it will be robbing Peter to pay Paul.”
It is already known that the NHS will need to plug a £30 billion deficit by the end of the decade, and the Conservative party has previously suggested that this could be achieved via efficiency savings.
Figures published today indicate that the Department of Health paid out a staggering £1.2 billion on bailouts in 2014-15.
The ten-figure sum was earmarked in order to assist no less than fifty troubled NHS providers, all of whom faced difficulties in meeting pay commitments, along with remunerating creditors and other expenses.
It is also telling that some of the £1.2 billion figure was required in order to address structural deficiencies in the health service. The replacing of ageing equipment and need to cut fiscal deficits in existing NHS budgets also contributed to the overall bailout.
Not only is the figure paid out by the Department of Health a large one, but there is also strong evidence that the bailout situation within the department is deteriorating.
The £1.2 billion total was in fact double the amount that was paid out by the department during the previous fiscal year.
Additionally, it is clear that the acute sector is becoming ever more dependent on bailouts. The proportion of this tranche of the NHS that required bailouts rose to one-third in 2014/15, a significant increase from the one-quarter equivalent from twelve months previously.
And some NHS trusts are evidently struggling significantly to meet costs. Over a dozen NHS trusts received bailout money that was worth more than 10 per cent of their annual income.
With three trusts having received funding in excess of £50 million, the level of bailouts within the NHS certainly cannot be described as trivial.
Commenting on this issue, King’s Fund policy director Richard Murray, a former senior analyst and economist for the Department of Health, pulled no punches in describing the figures as “horrific”.
Murray opined that the picture was one of irrevocable structural disintegration. “It just strikes me again how much the payment system in the NHS looks fundamentally broken – if you’ve got this many [providers] now reliant on an alternative source of funding to their commissioners.”
The NHS is, of course, not the first organisation of significant size and scale to receive bailout money in what is this age of austerity and economic malaise.
To give one example, the HBOS banking and insurance group received £37 billion of public money to prevent its collapse in October 2008.
But the figures reported with relation to the Department of Health do paint a picture of a gulf in funding in the health service that will need to be addressed in the immediate future.
And a particularly troubling aspect of this news is that the £1.2 billon figure does not convey the true extent of the bailout.
This does not include the £239m that the DH paid out last year in ‘dowries’ to struggling trusts, nor £177m in ‘non-recurrent’ payments to specialist acute providers to which NHS England agreed last year.
The serious nature of the budgetary problems that have been succinctly illustrated by these revelations led the aforementioned Murray to muse rather gravely on “whether the department will run out of cash [in 2015-16].”
The government body Monitor has announced that is it to undertake an investigation into the financial conduct of Mid Cheshire Hospitals NHS Foundation Trust.
Finances at the trust have deteriorated significantly, and the regulator will examine the reasons for this, and also attempt to establish an approach that will lead to an improvement.
Monitor intervened after it became evident that the trust was experiencing financial difficulty.
The Mid Cheshire Hospitals NHS Foundation Trust had, in fact, reported a surplus during last year’s accounting period, but its financial position has since declined significantly. Reports suggest that the trust will accrue a £5.4 million deficit for the 2015/16 financial year.
The trust is responsible for Leighton Hospital and the Victoria Infirmary, and plays a major role in one of England’s largest and most prosperous counties.
Speaking on the issue, Paul Chandler, Regional Director at Monitor, stated that the government body is concerned about the financial health of the Mid Cheshire Hospitals NHS Foundation Trust.
“The trust’s finances have deteriorated and the most recent projections show that things could get worse over the coming year,” Chandler warned.
“Patients in and around Crewe, Northwich and Winsford rely on the services this trust provides, so we’re investigating to find out more about the problem and what can be done to improve the situation,” Chandler continued.
Chandler emphasised that no decision has yet been made on whether regulatory action would be necessary, but he did indicate that such a decision could be expected imminently.
Independent NHS trust are intended to provide care on a sustainable basis, and it is a major part of Monitor’s duties to ensure that this remit is being met adequately.
In the case of the Cheshire trust, the degrading financial position of the trust has been a massive red flag to the government body that further investigation is vital.
In response to today’s budget statement, in which Chancellor George Osborne confirmed a real terms increase in NHS funding for 2015/16, the NHS Confederation is calling for an open public debate on NHS finances ahead of May’s general election.
Rob Webster, chief executive of the NHS Confederation, said: “An open public debate must happen now on NHS finances. We’ve been calling for it for a long time and politicians from all parties cannot duck it anymore – the public simply won’t allow them.
“We know this year will be tough for the NHS and the budget confirms this. Years of punishing price cuts for providers such as hospitals are taking their toll on NHS care. There is a good chance the additional money in commissioners’ budgets might only just cover the increase in demand, and be insufficient to cover improvements.
“The outlook for the next five years looks even harder for the NHS. The Five Year Forward View sets ambitious efficiency savings that are above what the service has delivered in tough circumstances over the last five years. Even where political parties commit to the £8 billion of funding this requires, it’s a daunting task. What is clear is that these savings, worth £22 billion, won’t be delivered through just price cuts. Instead, we will fundamentally need to change the delivery of care. This must be done in genuine partnership with the public and patients.
“The NHS is ready to make savings in the next parliament, building on the £19 billion they have delivered in the last parliament. This is a crucial reason why the NHS compares favourably to other health systems when it comes to efficiency, as the Commonwealth Fund study of international systems makes clear. We now need to give local areas the freedom and flexibility to make changes to how we deliver care.”
A major new proposal which gives responsibility for Greater Manchester’s £6bn health and social care budget to councils and health groups in the region has been given the go-ahead.
Chancellor George Osborne is expected to confirm the decision on Friday (27 February).
It means that from April 2016, control over regional healthcare spending decisions will pass from NHS England to local politicians, clinical commissioning groups and NHS trusts. However, actual budget control will not take place until the following year.
The unprecedented move to integrate health and social care in the region is intended to ease the mounting pressure on hospitals and establish a better standard of home care services.
Welcoming the devolution of healthcare spending to the Greater Manchester region, Councillor Mike Connolly, Labour leader of Bury Council, said: “Decisions need to be made in Greater Manchester and not Westminster.
“We are all agreed, certainly in the Labour Party, that health and social care must be integrated because it’s about providing that primary care – and it can only be good for healthcare across Greater Manchester.”
The devolved spending agreement will also see, from 2017, a directly-elected mayor with responsibility for transport, housing, policing and planning, in addition to health.