NHS funding hundreds of millions short of what’s needed to improve care, experts warn

Treasury’s funding settlement won’t avert crisis in the NHS, which is ‘on the cusp of disaster’, IPPR warns

The NHS funding pledged by Jeremy Hunt is hundreds of millions of pounds short of what is required to improve care in the crisis-hit health service, experts have warned.

In his autumn statement, the chancellor promised a further £6.6bn – a figure he said NHS chief Amanda Pritchard had described as “sufficient”. But health leaders warn that the money will allow the NHS only to stave off disaster, and will not be enough to meet new targets set out for the coming years.

The funding gap could prove to be even wider, as the extra money would not cover the cost of giving NHS staff pay rises linked to inflation.

The NHS is likely to remain on a “crisis footing” for the foreseeable future, the Health Foundation said.

Nurses are set to strike before Christmas after the government failed to award an above-inflation pay rise.

Stephen Rocks, an economist for charity The Health Foundation, said the settlement, which will increase the NHS budget by 2.9 per cent, is short of the 4.2 per cent needed to reduce waiting lists, leaving the service hundreds of millions of pounds short of what is needed.

The NHS currently has a waiting list of 7.1 million for planned care – a figure that is set to keep rising – while those waiting in A&E for more than four hours hit a record high in October, and ambulance response times also increased once again across much of the country.

In addition to reducing the planned-care waiting list, the Treasury has set new priorities for the NHS in exchange for the funding settlement, including halving ambulance response times, ensuring a two-week wait for GP appointments, and year-on-year improvements to be made in A&E waiting times.

Earlier this year, NHS England estimated it would need £6-7bn in 2023-24 to plug the holes in its finances left by inflation and the cost of staff salaries.

Mr Rocks told The Independent that Health Foundation analysis showed the NHS would need a 3.6 per cent increase in its budget to maintain standards of care, and 4.2 per cent to reduce its waiting list.

Thursday’s settlement for the NHS is even less than what was offered in 2019, when it was awarded a 3.4 per cent annual increase.

Mr Rocks added: “I think there are an awful lot of new pressures. Activity and demand in some areas are certainly going up, while some Covid-19 costs are proving persistent. The NHS has been given very high efficiency targets, which are higher than it managed to meet in the past, and higher than agreed in the NHS long-term plan.

“In particular, pay is an outstanding pressure. So taking all those things together, I think you would need very favourable headwinds in order to meet all the priorities within the NHS long-term plan, and tackle the elective backlog.

“A degree of realism is probably needed about what can be achieved with the funding that’s been given. It’s very challenging, you need a lot of things to fall into place, very high efficiency and low cost pressures. Again, if [staff] pay does go up significantly, that would change things.”

Director of the Health Foundation, Anita Charlesworth, said that Mr Hunt’s Autumn statement was “short-term relief”. But she added: “The reality is that the NHS is going to be treading water at best, as inflation bites and it faces rising pressures from an ageing population, pay, addressing the backlog, and ongoing Covid costs.”

“The NHS is likely to remain on a crisis footing” for the foreseeable future, she added.

According to Siva Anandaciva, chief analyst for the King’s Fund, the budget increase will only meet a proportion of the funding needs of the health service.

He said: “The £3.3bn covers non-pay inflationary cost pressures; you’re getting money to stay still. All of the money that would have had to be diverted from long-term plan priorities to make sure you’re balancing the books is in theory protected, but the problem is, the budget also came with new expectations – ambulance performance improvement, which is going to take a herculean effort; A&E waiting times improvement; and then improving access to general practice.

“On the one hand [the Treasury has] given more money to help the NHS stand still, then [it’s been] given new expectations, but all the money has already been allocated just to stand still. It’s very hard to see how the NHS would meet those new commitments, meet its existing commitments, and balance the books.”

Pay rates for NHS staff for 2023-24 and 2024-25 will not be set until next year, however this year the pay award of 4-5 per cent was not fully funded by the government. Analysis by the King’s Fund shows that every 1 per cent increase in the staff pay award will create an £800m to £1bn cost pressure on the NHS.

It is not yet clear what the government will award staff next year, however on Wednesday, the new health secretary, Steve Barclay, urged caution from the NHS Pay Review Body, which makes recommendations on health service pay increases, warning that the NHS budget had already been set until 2025.

Chris Thomas, from the Institute for Public Policy Research, told The Independent that the funding is less than the NHS needs, and less than what it is predicted to need. He said it will only cover “key priorities” and could mean a trade-off on what the health service is able to do and what it isn’t.

“What it definitely means is that there’s no room in that money for transformation ... there’s no money for reform, there’s not the capacity to double-run services, to take up innovation. Then it seems quite difficult to meet that ambition that Jeremy Hunt talked about quite extensively, or to transform waiting lists, or avert crisis over winter, or long-term stuff.

“I think we’re on the cusp of disaster [in the NHS], and the pressure in winter, the perpetual crisis – I don’t know if the £3.3bn averts that,” he added.

Richard Sloggett, director of the Future Health think tank and a former adviser to the Department of Health and Social Care, warned that areas such as public health and primary care are likely to lose out following the autumn statement.

One of the key targets set by the Treasury for the NHS is for it to improve emergency care waiting times year-on-year. This year, hospitals have seen new monthly record highs for long waiting times across emergency care in England.

Responding to the budget announcement, the Royal College of Emergency Medicine said that it welcomed the funding, but that given current inflation, “trusts will still need to make difficult decisions. There will be concern around what the NHS is able to do and what it may need to cut.”

Under the Treasury’s proposals, ambulance service response times for category two patients, such as those suspected of suffering from a stroke, would be reduced to 30 minutes on average. The managing director of the Association of Ambulance Chief Executives, Martin Flaherty, said that for this to be achieved, hospital handover delays would need to be eradicated, and the government would have to commit to a multi-year investment in ambulance services based on an independent demand and capacity review.

A spokesperson for the Treasury said that a process would be undertaken by the independent NHS Pay Review Body on possible pay increases, and that its conclusions would be published next year.