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Government reveals extra funding to shore up NHS budget

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Philip Hammond has announced additional government funding for the health service, saying that the government “will always back the NHS”.

In his budget speech today, the chancellor said he recognised that the NHS was “under pressure” and announced £2.5bn of extra revenue funding to be spread over the next two financial years, plus an in-year boost of around £350m for winter pressures.

“We also recognise that the NHS is under pressure right now”

Philip Hammond

He also announced capital funding for the controversial development plans that have been badged by NHS leaders as a way of transforming how care was delivered, especially boosting the integration of services, but have also been dogged by concerns that they will lead to cuts.

Announcing the funding, Mr Hammond said: ”Our NHS is one of our great institutions. An essential part of what we are as a nation. And a source of pride the length and breadth of the country.

“Its values are the values of the British people, and we will always back it,” he said. “Dedicated NHS staff are handling the challenges of an ageing population and rapidly advancing technology with skill and commitment.”

His singling out of the health service in his speech follows recent lobbying by NHS leaders for more funding. In October, NHS England chief executive Simon Stevens hinted strongly that more cash would be needed in the chancellor’s autumn budget to sustain the NHS over the next few years.

Echoing comments he had made at the weekend, Mr Hammond noted that the government had already “endorsed and funded” NHS England’s Five Year Forward View in 2014, and met its funding ask by providing an extra £10bn in real terms per year by 2020.

However, he said: “We acknowledge that the service remains under pressure and today we respond. First, we will deliver an additional £10bn package of capital investment over the course of this parliament – to support the sustainability and transformation plans which will make our NHS more resilient.

hammond

hammond

Philip Hammond

“But we also recognise that the NHS is under pressure right now,” he said. “I am therefore exceptionally, and outside the spending review process, making an additional commitment of resource funding of £2.8bn to the NHS in England.

He said that £350m would be available “immediately” to allow trusts to plan for this winter, with £1.6bn to follow in 2018-19 and the remaining £850m in 2019-20.

Mr Hammond also revealed commitments to fund pay rises for nurses and other NHS staff, but was criticised for failing to mention continuing professional development.

Responding to the budget speech today, NHS England chair Sir Malcolm Grant said: “The extra money the chancellor has found for the NHS is welcome and will go some way towards filling the widely accepted funding gap.

”However, we can no longer avoid the difficult debate about what it is possible to deliver for patients with the money available,” he said. ”The NHS England board will need to lead this discussion when we meet on November 30.”

Sir Malcolm Grant

Sir Malcolm Grant

Malcolm Grant

Richard Murray, director of policy for the King’s Fund think-tank, said: ‘The additional money for the NHS is a welcome shot in the arm as it struggles to meet rising demand for services.

“But it is still significantly less than the £4bn we estimate the NHS needs next year,” he said. “Even with this additional funding, the service will struggle to meet key targets and provide the investment needed in services such as general practice and mental health.”

He described the “significant” increase in capital spending after several years of these budgets being “raided” to cover deficits as “good news”.

However, he noted that the “package” promised by the chancellor only included around £4bn of actual extra government investment and would need considerable sums of money to be raised through NHS land sales and other means to reach £10bn.

Documents released by the Treasury this afternoon confirmed that the total capital funding announced by Mr Hammond relied on a large amount of asset sales and private funding, with less than half coming from extra government funding.

Nigel Edwards

Nigel Edwards

Nigel Edwards

Nuffield Trust chief executive Nigel Edwards said: “The chancellor has committed to a sizeable extra funding boost of around £2bn to the NHS next year. This was the right decision and will bring respite for patients and NHS staff alike. For now at least, we have dodged the bullet.”

But he too noted that the figure “really needed next year” to get the NHS on a permanently stable footing would have been at least £4bn. “Today’s pledges fill about half of this,” he said. “The year after next, the NHS will again face limited additional funding, and we may find ourselves staring down the barrel.”

“The £3.6bn in additional capital funding over the rest of this parliament will come as a welcome relief to hospitals who have seen the list of buildings needing urgent repairs rise sharply. This follows two years of repairs and investment being put off in order to fund day-to-day services,” said Mr Edwards.

There was widespread disappointment, however, at the lack of extra funding announced for social care. Mr Murray highlighted that the social care sector faced a £2.5bn funding gap by 2019-20. 

“We are extremely disappointed”

Margaret Wilcox

Margaret Willcox, president of the Association of Directors of Adult Social Services, said: “We are extremely disappointed that the government has not addressed the need for extra funding for adult social care.

Lord Porter, chair of the Local Government Association, added: “It is hugely disappointing that the budget offered nothing to ease the financial crisis facing local services.”

Budget speech: Chancellor Philip Hammond on the NHS

Our NHS is one of our great institutions. An essential part of what we are as a nation. And a source of pride the length and breadth of the country.

Its values are the values of the British people, and we will always back it. Dedicated NHS staff are handling the challenges of an ageing population and rapidly advancing technology with skill and commitment.

And, Mr Deputy Speaker, the number of patients being treated is at record levels. Cancer survival rates are at their highest ever level.

17 million people are now able to access GP appointments in the evenings and at weekends. And public satisfaction amongst hospital inpatients is at its highest level in more than two decades.

It is central to this Government’s vision that everyone has access to our NHS, free at the point of need. That is why we endorsed and funded the NHS’s Five Year Forward View in 2014. And met its funding ask – providing an extra £10bn in real terms per year by 2020.

But even with this additional funding, we acknowledge that the service remains under pressure and today we respond.

First, we will deliver an additional £10bn package of capital investment over the course of this parliament. To support the sustainability and transformation plans which will make our NHS more resilient. Investing for an NHS which is fit for the future.

But we also recognise that the NHS is under pressure right now. I am therefore exceptionally, and outside the spending review process, making an additional commitment of resource funding of £2.8bn to the NHS in England.

£350m immediately to allow trusts to plan for this winter. And £1.6bn in 2018-19, with the balance in 19-20, taking the extra resource into the NHS next year to £3.75bn in total. Meaning that it will receive a £7.5bn increase to its resource budget over this year and next year.

Mr Deputy Speaker. Our nation’s nurses provide invaluable support to us all in our time of greatest need and deserve our deepest gratitude for their tireless efforts.

My Rt Hon Friend the health secretary has already begun discussions with health unions on pay structure modernisation for Agenda for Change staff to improve recruitment and retention.

He will submit evidence to the independent pay review body in due course. But I want to assure NHS staff and patients, that if the health secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement.

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Readers' comments (1)

  • The announced £350 million to assists trusts is potentially already too little, too late.

    Right back in 1997, the Labour government assigned £300 million (£around 500 million today adjusted for an averaged 2.7% inflation per year) in additional expenditure on the NHS for winter pressures.

    In 2013, the Coalition government announced “A&E departments will benefit from an additional £500 million over the next 2 years to ensure they are fully prepared for winter.”

    In the winter 2015, the Conservative government included “£400 million in resilience money” for winter in the NHS England budget.

    So every government for the past 20 years has argued that around £500m is enough to make a difference when it comes to winter pressures on the NHS...

    Last year that £500 million got us 88% of patients seen within target in January to March this year—a record low for such a period, and every single winter before that has seen a statistically significant downturn in department performance.

    £500 million is just 0.2% of the debt that the NHS currently has outstanding and a mere drop in the ocean. It will not conjure up more acute beds today to deal with already poor performance of most trusts on the 4 hour target, or provide us with clairvoyance enough to foresee a change in social care availability to speed up discharges.

    I look forward to another winter of discontent as I state down the line of ambulances waiting to unload the patients who need my care.

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