UK health spending ‘to grow less than in austerity era’, analysis reveals

The chancellor’s extra billions for healthcare will equate only to a real-term rise of 1.2%

Health spending over the next two years will grow less than during the austerity era of the last decade, according to a new analysis of the autumn statement.

The chancellor, Jeremy Hunt, a former health secretary who previously campaigned for greater resources from the backbenches, announced last week that the NHS would receive an extra £3.3bn in each of the next two years. With severe pressures growing on the service, he said it would be one of his “key priorities”.

However, research by the Health Foundation charity has found that when the whole health budget is included – covering the NHS, training, public health services and capital investment – it will only increase by 1.2% in real terms over the next two years. That is below the 2% average seen in the decade preceding the pandemic, as well as the historical average of about 3.8%.

The research comes as NHS trusts face almost impossible decisions over staff wages, waiting lists and keeping buildings and equipment up to date. The Health Foundation analysis highlighted the continued “significant uncertainty” facing the delivery of health services over the remainder of this parliament. It said there were now “difficult trade-offs” on issues such as pay and the backlog.

Unions are already raising the alarm after the health secretary, Steve Barclay, called on the body that advises on pay to show restraint in its recommendations for next year.

In a letter to the NHS pay review body (NHSPRB) he states that “in the current economic context it is particularly important that you have regard to the government’s inflation target when forming recommendations”.

The government’s inflation target is 2%, but is now running at 11.1%.

Sharon Graham, the general secretary of Unite, which represents more than 100,000 NHS workers, said: “The NHSPRB board are clearly aware that without proper wages the exodus of healthcare staff will get worse, putting the very survival of the NHS at risk. The situation is clear: we are in a fight to save the NHS, and workers are ready to take a stand.”

Nurses have already warned that they will announce strike dates for December unless ministers begin “detailed negotiations” on pay. Unite has also begun balloting 10,000 health service workers for strike action on top of thousands of other NHS workers who it has been balloting since October. Unite is also planning to ballot thousands more in the coming months.

Anita Charlesworth, director of the Real (Research and economic analysis for the long term) Centre at the Health Foundation, said that there had been “short-term relief” for the health service, especially when compared with the cuts made to non-protected departments.

However, she said it would be “treading water at best as inflation bites and it faces rising pressures from an ageing population, pay, addressing the backlog and continuing Covid costs”.

“If other parts of the system – especially social care and community care – are also struggling with cost pressures, this makes it harder to deliver healthcare and the 2% will buy less,” she said. “Efficiency can only take the NHS so far. Since 2010, if we had kept up with German health spending we’d have spent £73bn more each year, and £40bn more if we’d kept up with France.”

She added: “Without greater recognition that our health is our wealth – and vice versa – and a greater focus on its long-term financial sustainability, the NHS is likely to remain on a crisis footing, with difficult trade-offs such as performance and rising waiting lists for the foreseeable future.”

NHS England’s chief executive Amanda Pritchard welcomed the funding in the autumn statement, saying it showed “the government has been serious about its commitment to prioritise the NHS”. However, last month NHS England forecast a £7bn shortfall in its funding next year that, it warned, could not be plugged with efficiency measures alone.

A spokesperson for the Treasury pointed to Hunt’s comments in the autumn statement in which he said: “Because of difficult decisions taken elsewhere today I will increase the NHS budget, in each of the next two years, by an extra £3.3bn … We commit to a record £8bn package for our health and social care system – a government putting the NHS first.”

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Michael Savage Policy Editor

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