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The Government has made its long-awaited announcement on health service funding, claiming that the NHS is to receive an extra £20 billion a year, with the first of this new money made available from April 2019. The deal was agreed between the Prime Minister, Chancellor of the Exchequer and Jeremy Hunt last Friday and follows months of pressure by Hunt, whose standing at centre of the government continues to grow. However, as is becoming clear already this morning, there is much that has not been agreed, such as how to fill the funding black hole it creates, and how the money is to be spent.

In a purely political and somewhat cynical move, Mrs May has unashamedly linked this NHS windfall to a “Brexit dividend”, though with no agreement on the terms of EU Withdrawal, there is almost no economic credibility to this at all.  In fact, Hunt has been keen immediately to clarify that the majority of funding will come in the form of a greater tax burden, to be detailed by the Chancellor in the autumn Budget.

The NHS budget will rise by an additional average 3.4% annually – and though this is a big increase on previous years, it is well below what was called for and even below the 3.7% average the NHS has received since 1948.

  • Prime Minister has confirmed that a ten-year plan has been agreed, with the Treasury earmarking the exact funding figures for the first five years.
  • King’s Fund, Nuffield Trust, the Health Foundation and politicians from across the spectrum; had been pushing for an above 4%increase year-on-year.
  • The five-year funding settlement is to cover front-line budgets overseen by NHS England only. Budgets such as health education, training, and public health remain unprotected, though this had been rumored to be addressed.
  • As mandated by the provisions of the Barnett formula, an extra £4bn a year is allotted to the Scottish and Welsh Governments (and for Northern Ireland) for their own implementation.

Context

With so little detail to the funding deal, and almost meaningless statements about budgets in their billions, there is really very little so far for the public to make a judgment on. Presumably, for anyone actually accessing, working in or using the NHS, what people really care about is outcomes.  How refreshing and how different the statement could have been, had Mrs May said she was announcing a funding settlement for the purpose of achieving outcome x, y and z. That the funding was there until such time as the NHS was fit for purpose;  until we had enough doctors and nurses, until our commitments to waiting times were met, and until we had an NHS that felt like it was thriving, not surviving.

After all, the numbers themselves are hardly anything to shout about.  (Rather they remind us again quite what an astonishing time for the NHS the Blair years were.) What we need to hear about is the government’s ambition and commitment to delivering on outcomes.

Administration Period Annual Growth Rate in Funding
Labour (Blair & Brown) 1997 – 2010 6.0%
Coalition Government 2010 – 2015 1.1%
Conservative Government (Cameron & May) 2015 – Present 2.3%
Government (*Future) 2019-2024 3.4%

Implications

The government would have you believe this an historic announcement, worthy of the 70th birthday it is timed to coincide with. Preluded by Simon Stevens’ keynote address to Confed18 last week, which took an unusually optimistic tone, this long-term funding settlement is being packaged as an opportunity to re-design services, implement innovation and truly take the NHS into the next century.

But read between the lines, and you discover that NHS England and its sister organisation NHS Improvement – recently condemned for massaging its deficit figures – are jubilant because this is simply survival cash. After all, it was the Institute for Fiscal Studies’ report, that concluded an annual increase of 3.3% was needed, to “maintain current service levels.” This headline announcement then is a victory for the sustainability agenda. It does not speak to the innovation and radicalism of the Accelerated Access Review or the Life Sciences Industrial Strategy. Nor does it cater to the devastated budgets of social care and other Government agencies like Public Health England and the Care Quality Commission.

We are left with a plethora of unanswered questions – how will this money help us catch up on cancer survival rates? What are the next steps in terms of implementation of this annual increase? Simon Stevens hinted  that we would see some form of consultation on how this could pan out.  The demands on these new funds are immense, not least to support the integrated care agenda, cautiously endorsed by the Health & Social Care Committee last week and reviewed by Decideum here.

Moving on to the glass half-full approach; relative to what we have experienced since 2010 under austere times, this does represent significant progress. It also underlines the influence Jeremy Hunt now possesses in Whitehall, it potentially stabilises NHS leadership at the top for a while at least, which in turn is crucial for planning and engagement on all branches of the NHS tree.  But much of the work remains – to ensure the money is spent well, that it delivers for patients, and that it represents a long term shift in thinking about funding healthcare.

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