NHS funding faces its biggest real cuts since the 1970s as pressure mounts on Jeremy Hunt to prioritize public service funding over tax cuts in his budget, an influential analysis shows .
The Chancellor is planning to cap the £4.6 billion the NHS pays each year to cover shortages of frontline doctors and nurses, the Guardian has learned.
Health spending in England is expected to be cut by 1.2%, worth £2 billion, in the new financial year starting next month, even as the NHS faces additional costs due to ongoing wage strikes and workforce expansion, according to a new analysis by the health department. . Institute for Fiscal Studies (IfS).
After adjusting for inflation in 2022-23 prices, the health budget – almost entirely funded by the NHS – will rise from £168.2 billion in 2023-24 to £166.2 billion in 2024-25.
If the government doesn’t reconsider, reduced funding will force the NHS to cut staff numbers, staff wages, services to patients, or all three. think tank warn.
His intervention comes as Hunt considers cutting billions from his public spending plans to pay for further cuts to income tax or national insurance in this week’s budget.
Economists calculated that the move would mean cuts of up to a fifth in the budgets of certain “unprotected” departments across five years of parliament, in areas such as justice, home affairs and local government.
Projected levels of public sector spending in the next parliament are likely to mean cuts equivalent to those taken by David Cameron’s government during the austerity period of 2010 to 2015. That prompted warnings that the next government would be unable to implement the spending and would be forced to raise taxes or borrow more to fund emergency spending.
The Lib Dems have said plans to cut the NHS budget are “disgraceful”. Physician leaders warn it could harm patients. Hospital bosses say they will be left in dire straits if it goes ahead, with the estimated cost of the 15-month strike at £2bn putting their finances in jeopardy.
Lib Dem Treasury spokesperson Sarah Olney said: “What this Conservative government has done to our NHS is simply disgraceful. They have led to the health service being grossly underfunded, with the first and foremost patient.”
She urged Mr Hunt to cancel the budget cuts he proposed to MPs on Wednesday.
Meanwhile, hospital doctors have warned that going ahead with planned cuts could be “terminal” and harm patients as the NHS is already in “eternal crisis” and unable to meet growing demand for care.
Dr Tim Cooksley, past president of the Society for Acute Medicine, said: “Against this backdrop, rumors of funding cuts could be the final straw for many colleagues, undoubtedly causing serious harm to a large number of patients.
“There is consensus that the situation in the NHS has never been more challenging. Funding is only part of the solution but it is vital. Reductions at this stage could be a terminal event.”
“Existing [government spending] The plan calls for actual cuts of around 1.2% [NHS] daily expenses [in 2024/25] – The biggest drawdown since the 1970s after the 1976 IMF crisis, except for the past two years as temporary funding related to the Covid-19 pandemic expired.
“Real reductions in health care spending require simultaneous reductions in staffing, wages, and service delivery.”
Phillips also revealed that the government must urgently inject an additional £4.4 billion into the Department of Health and Social Care this financial year to ensure that the department and the NHS do not overspend their budgets. DSHC has not made the matter public.
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The NHS is believed to have received around £4bn of the £4.4bn to cover staff pay rises, strike costs, plans to help the service cope with the winter and the share of the health surcharge borne by migrants or immigrants. Their employer pays for their NHS care.
DHSC’s budget for 2023-24 was originally planned to be £164.2 billion. However, that figure rose to £168.2bn as ministers gave what health economists called an “in-year cap” of around £4bn to avoid shortages.
The sector was and is due to receive a budget of £166.2 billion in 2024-25. However, Phillips explained that the £4.4 billion in additional funding received this year means next year’s budget will be £2 billion less than this year’s, prompting IS to intervene.
Julian Hartley, chief executive of NHS Providers, which represents health service trusts, said: “These figures will serve as a wake-up call for trust leaders who are already struggling to provide care for patients in a challenging financial environment.
“Fifteen months of strike action has left the NHS with an eye-popping bill due to delays in surgeries, scans and procedures and the loss of income caused by providing cover for striking staff.
“With concerns that strike action looks set to continue into the next financial year, trust leaders have reason to worry that these costs may continue to rise. Given the additional pressure that strike action puts on the NHS budget, the Treasury is fully funding strike costs to It’s important.”
Hunt is also planning to announce limits on NHS funding to employment agencies – £4.6 billion nationally and £3.5 billion in England alone – as a result of a Treasury review of productivity across the public sector. He will limit the amount of money the entire service can offer them.
Shadow health secretary Wes Streeting branded the chancellor “Hunt the hypocrite” after the DHSC last year increased the annual cap on such spending by £450m. Streeting also pointed out that in 2015, when Hunt was health secretary, he announced a similar crackdown on organizations charging “extortive hourly rates, costing them billions of pounds a year”.
Streeting said: “Taxpayers are paying a heavy price for 14 years of Conservative failure.
“The Conservatives refused to train the doctors and nurses our NHS needs, leaving the health service reliant on scam recruitment agencies. They then forced doctors and nurses to go on the worst strike in NHS history, leaving patients waiting longer Time, taxpayers foot the bill.
“Expecting hypocrite Hunter to fix the mess he created is like expecting arsonists to put out the fires they started – it’s not going to happen.”
We contacted DHSC for a response.
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