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Health education budget freeze will 'limit placement funding'

  • Health Education England’s underlying budget will be frozen in nominal terms until 2020-21
  • It will also lose £1.2bn of funding for student nurses and allied health professionals from 2017, as these payments are stopped
  • HEE will continue to control placement fees for students training in the NHS 

Health Education England’s chief executive has warned that a freeze in its underlying budget will have knock-on “consequences” for the NHS, including limiting funding to trusts for training placements. 

HEE’s budget will over time lose the £1.2bn which currently pays for free university education for nurses and other allied health professionals. This will in future be paid for by individuals, under plans announced in today’s spending review.

However, aside from this change, HEE is expecting the remainder of its budget to be fixed in cash terms – not be uplifted for inflation – from now until 2020-21.

Ian Cumming said this could mean clinical placement fees for medical students and other NHS staff such as nurses, which it funds, could also be frozen. This would mean a cut in real terms, he told Nursing Times’ sister title Health Service Journal.

Speaking in the Commons today, the chancellor said student nurses and other allied health professional trainees would have to fund their own education via student loans from 2017.

In an interview shortly after the spending review statement, Mr Cumming told Health Service Journal that there would be consequences of its budget being frozen in cash terms.

He said: “We will be getting flat cash increases, meaning the £3.5bn we get in 2015-16 we will [still] get in 2019-20. That is a much better position than it could have been considering some of the conversations that were happening early on around 25 per cent reductions across all budgets.

“That allows us to continue to invest in postgraduate medical education and local workforce transformation but it does mean we are going to have to make year on year savings because we aren’t going to have inflation funded,” he said. “We are going to have to absorb that within the organisation as we move through each of those years.”

Ian Cumming

Ian Cumming

Ian Cumming said: ”This isn’t a perfect settlement but in the current economic climate a flat cash settlement is not a bad settlement.”

He said it was unlikely the financial savings would lead to radical cuts, but added that HEE funded “an awful lot of clinical placements”.

”If we recognise that we have been funded at flat cash then we are going to have to fund clinical placements at flat cash,” he said. “That may be somewhere that we have to go but this is a level of detail we haven’t looked at yet.”

He said the budget changes would be phased in and would not take effect until the September 2017 intake, with the full impact expected to take five or six years to work through the system.

Mr Cumming said even after the changes, which will require secondary legislation, HEE will remain in control of £300m funding for clinical placements for staff. This money is paid to NHS trusts to cover the costs of students training alongside NHS staff.

He suggested this would give HEE a degree of control over which placements it will fund in the NHS to help influence the numbers and distribution of students across the system.

Mr Cumming said: “We will be using our clinical placement fees, not to manage the market, but to ensure the NHS gets [the workforce] it needs.

“If we see a growth in one city attracting students away from other areas where we need to train nurses we will have to use our placement fees as a lever,” he added.

Meanwhile, Dame Jessica Corner, chair of the Council of Deans of Health, said details about potential support for students from the poorest backgrounds,  who may be put off from taking a student loan, were yet to be announced but were under discussion.


Readers' comments (4)

  • Its a sad day. I want to apply for a Mental Health Nursing BSc in 2016.
    I am aware that there can be a drop off rate on nursing courses which seems a waste of money and resources.It is not a fair system when places are restricted - and - some applicants who would make excellent nurses are turned away - in this the Chancellor is right!
    BUT why was the following option not considered? Firstly keep the funded placement system - have the student nurse fund themselves through the student loan system for tuition fees and personal support - just like all other students. However when they start working for the NHS after graduating - have those tuition fee loans reduced to zero over a three year period. That way those who do not put back into the system once they have their degrees or drop out can pay for themselves - whilst those who give back to the system they have benefited from will get that much needed support. This would be fairer for students from low income households? Would it result in more nursing applications from people who are dedicated to the NHS? I heard on a BBC documentary last year that it costs HR £23K to recruit a qualified nurse from Portugal and the Trust representative noted that if they stayed one or two years they would think they were in profit! Compare that to £18K to train a UK citizen. If the Chancellor presses forward with this cut to HEE - it will cost the country more money - and in this aspect the Chancellor is short sighted.
    Please if your reading this and have any influence in the debate can you put these points forward. I love the NHS - it might not be perfect - but what's the alternative - doesn't bear thinking about!

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  • I agree with Darren, good points, well explained.
    It is sad that the reform is not flexible: as you mention, people from poor backround will be put off, graduates as well.
    I am in the same position: I want to apply for 2016 intake, however, if the reform takes place, I will be forced to look for alternatives and forget my dream to study nursing in England.
    I hope that the Chancellor is not, as Darren says, short sighted and that our voices will be heard.
    I am still wondering though, why does the reform wants the healthcare students pay such as huge fee for their education whereas it's clear that they won't earn enough to repay the debt. Why there is such a huge debate about the money when the reality is obvious and people like us, living this reality, already have good and clear ideas how to solve the problems in a less dramatic way.
    Now I am wondering, how to take an action and be heard?

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  • As a current student nurse, the bursary just covers travel to placement and parking for 5 days a week (this includes the percentage that is paid back). I am quite lucky I have a husband who can support me with bills etc. Others are not so lucky. Having to pay for all of the course fees, travel to placement etc. themselves and not actually getting paid for any work will surely put off a lot of students. I understand that a lot of people are saying nurses should pay just like any other student. Any other student can go to uni and come home (unless they have a placement year- which is PAID) nurses work 37.5 hours a week (which will be UNPAID), as well as uni, as well as having to incur all the other costs of petrol and parking when working.

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  • Darren has a good solution. Pay the same as everyone else after 3-4 years service to the NHS. Loan goes to Zero. The armed services do that for trainee doctors. Why can the NHS not do something similar? It would sort the nurse shortage out as well.

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