Extra billions will only ‘keep the wolf from the door’ for NHS

The UK’s national health service is to receive an extra £2 billion in funding next year – but health service leaders say the money is the bare minimum extra cash needed to keep the service running.

Chancellor George Osborne announced yesterday that the Conservative / Lib Dem coalition government would provide an extra £2 bn to frontline health services across the UK. He said the money a “down payment” in response to a plan unveiled by NHS leaders, which calls for an extra £8bn a year above inflation by 2020.

The new funding will be officially announced in the Chancellor’s Autumn Statement on Wednesday – but health service think tanks say the extra funding will only help to address the immediate pressures generated by growing demand for services and a virtually static overall budget.

Rob Webster, chief executive of the NHS Confederation, which represents health service managers, responded to the announcement:

“This announcement is excellent news for the NHS and provides funding to bridge the gap between what we are currently spending and what needs to be spent in 2015/16 to deliver the level of high quality services the NHS must in order to keep the country healthy. We have been saying for some time that NHS finances need to be shored up next year, so we can build a platform for the next five years.

The Confederation had already stated that £2 bn was the minimum needed to ‘keep the wolf from the door’, and warns that the quality of services will suffer if the funding gap is no addressed.

The warning signs that the health service is unable to cope are already starting to show – performance targets in A&E waiting times, cancer and hospital operations have all slipped in 2014, and a severe winter would put the service under even greater strain.

General Election looming

The announcement comes less than six months ahead of the UK general election, and the health of the NHS is set to be one of the key battlegrounds – one in which the Conservatives have traditionally trailed behind the opposition Labour party in terms of public confidence.

The nature of the new funding, and where it has been drawn from has faced a great deal of scrutiny, and scepticism from political opponents. Of the £2bn, around £1.3bn will be money found from savings in other government departments. The remaining £700m is to be taken from within the existing Department of Health budget, but will be guaranteed for use in patient services.

Labour have pledged to add extra funding on top of this announcement, with a further £2.5bn a year to be drawn from a so-called mansion tax and tax loopholes being closed down.

The scepticism about the announcement has not been confined to political opponents. Independent think tank the Nuffield Trust challenged the figures, saying the new spending amounted was not £2 billion, but £1.7 billion.

Nuffield Trust Chief Executive Nigel Edwards said: “This new funding will bring the NHS through what looked like being an impossible year in 2015/16.”

He added: “Our analysis suggests the extra £1.7bn will mean English health service funding keeps pace with the growing and aging population next year. Further increases like this will be needed every year to 2020, alongside deep reform, for the NHS to keep its current shape and standards. I’m glad the Government has started facing up to the very difficult decisions this will mean.”

He added that £550m of the funding would come from the Department of Health’s projected underspend, but that this option may well not be available in future years, and that the next increases needed to be entirely new money.

“The £1.5bn boost to general NHS funding will allow organisations and staff some respite from fire-fighting, and make progress where reform is underway. However, it is only around the sum which will be needed to match the growing costs and demand for treatment — we still need to ensure local leaders have the time and money for long term reform.

“Spending a further £1.1bn over four years to improve general practice and out of hospital services shows the right priorities. GPs working together, often in large organisations, will be the basis for future reforms but they need more money to make this work.”

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