- Spending review to give NHS England a real terms budget increase of £3.8bn in coming financial year
- Redrawing of NHS “ringfence” will see cuts to public health and an end to nursing bursaries
Tomorrow’s comprehensive spending review will give NHS England a real terms increase to its budget of nearly £4bn in 2016-17, but is expected to see further cuts to public health and an end to free nurse education.
The plan to give NHS England £3.8bn of real terms growth next year represents a significant frontloading of the £8.4bn promised over the coming half decade.
It marks an attempt to staunch the financial crisis in the health service’s provider sector while also pump-priming the creation of new models of care set out in Five-Year Forward View.
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As a result of the frontloading, after next year, the following four years will see real terms investment drop to just £500m in the third year, before rising again to £1.7bn in in 2020-21.
In a statement issued last night, NHS England chief executive Simon Stevens said the settlement represented “a clear and highly welcome acceptance of our argument for frontloaded NHS investment”.
However, the decision to draw the NHS “ringfence” around NHS England’s budget of around £101bn – rather than around overall Department of Health expenditure, as was the case in the last parliament – means other aspects of health spending will not be similarly protected.
It is being widely reported that some of the money used to fund the NHS England increase will come from further cutbacks to public health and, as previously trailed, the current bursary system for funding nurse education is expected to be replaced with student loans.
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According to Nursing Times’ sister title Health Service Journal, of the £3.8bn increase coming to NHS England next year, around £3.4bn will be new money from the Treasury. The remaining £400m will come from the Department of Health’s existing allocation, including some money from public health budgets.
It is understood that the precise real terms increase NHS England has secured over the coming half decade is £8.4bn. The profile of that investment will be:
- 2016-17: £3.8bn
- 2017-18: £1.5bn
- 2018-19: £0.5bn
- 2019-20: £0.9bn
- 2020-21: £1.7bn
The rationale for low rates of growth in the third and fourth years is understood to be in order to hold back some money to cover the cost of fully implementing the government’s seven-day services policy in the final year.
In a statement, the Treasury said in total the NHS would receive “an additional £10bn a year above inflation by 2020, with £6bn frontloaded by the first year of the spending review”.
As well as the new £3.8bn, this £6bn figure includes £2bn above inflation in NHS England’s budget for the current financial year that was allocated in last year’s autumn statement.
Chancellor George Osborne said: “You can only have a strong NHS if you have a strong economy and it’s only because we have taken the difficult decisions needed to cut the deficit and are delivering economic security that we are able to commit an additional £10bn a year by 2020 to the NHS.
“We will deliver £6bn a year extra investment straight away, as those in charge of the NHS have requested. This means I am providing the health department with a half a trillion pound settlement – the biggest ever commitment to the NHS since its creation.”
“Employers will be concerned to ensure any action taken doesn’t deter applications for training places”
He said this would mean “world class-treatment for millions more patients”, deliver a “truly seven-day health service”, and allow the NHS to implement the Five-Year Forward View.
However, the decision to redraw the NHS “ringfence” to exclude budgets like public health and health education is likely to prove highly controversial and unpopular with many in the nursing profession.
The suggestion that seven-day services can be delivered within the £8bn settlement will also be greeted with scepticism by some in the service.
Commenting on the expected changes to the way nurse education is funded, Danny Mortimer, chief executive of NHS Employers, said: “Employers will be concerned to ensure that any action taken doesn’t deter applications for training places or create an additional pressure on the pay bill to meet expectations that loans will be paid off as part of a recruitment package, and we will have to watch this closely.
“Employers will also hope that the introduction of any change will be done in a measured way and appropriately phased,” he said. “However there is a general recognition that we do need a training system that is more flexible and one that can quickly respond to changes in demand.”
“The NHS needs this immediate funding boost to stabilise itself, fulfil its essential functions and keep patients safe”
Commenting on the overall cash injection for the NHS, Janet Davies, chief executive and general secretary of the Royal College of Nursing, said: “A realistic long-term funding settlement for the NHS has been desperately needed for some time. Short-term fixes over the years have caused huge problems in terms of deficits and staffing and patients have felt the brunt.
“The Five Year Forward View sets out clearly how the NHS needs to adapt to the demands placed on it, which are unprecedented in its 67 year history and it is right that implementing this vision should be a priority for funding,” she said.
She added: “The NHS needs this immediate funding boost to stabilise itself, fulfil its essential functions and keep patients safe. It is still unclear how exactly this funding will also deliver a shift to seven day services, or what those services would look like for patients or staff.”