The NHS in England is heading for an
unfunded overspend of £4.8bn this financial year, meaning that
next week the Chancellor will need to grow the overall health
budget by at least 3.6% just to manage current day to day cost
pressures, the Nuffield Trust says today.
The analysis comes in a briefing looking at the fine
print of NHS spending commitments and the impact of transfers
from the Department of Health and Social Care budget to that of
NHS England. It reveals that even by July, the day to day running
costs of the NHS had already required the budget to be boosted by
a further £7bn in transfers from the Department, in addition to
the £165bn spending envelope set for it in the March Budget
earlier this year.
These transfers will put pressure on
the department's other responsibilities, including health care
infrastructure, buildings and technology, public health and adult
social care, that were not protected from real terms cuts under
an artificial distinction made by the previous government between
“NHS” and non-NHS health spending.
Despite these in-year transfers, the
analysis explains that the NHS will need a further £4.8bn for
this year to cover the higher rate at which NHS trusts have
already been spending, as well as to cover the offer agreed
between the government and doctors' unions in July.
Author Sally Gainsbury argues that a
lack of transparency affecting NHS accounts is hampering adequate
planning and understanding of health service budgets and calls
for an end to the misleading separation between NHS and non-NHS
health and social care budgets when funding is announced. This
would better recognise that investment in public health, health
care infrastructure, social care and the NHS are all
interdependent
The analysis finds
that:
-
Taken together with the impact of
pay settlements and the cost of pensions uplifts, these cost
pressures mean day to day spending by NHS England will this
year be £12.9bn higher than in
2023/24, of which £4.8bn is
not currently covered by NHS England or DHSC
budgets.
-
Fully funding that without further
cuts to DHSC's unprotected budgets would require a real-terms
headline increase to DHSC's 2023/24 revenue budget as set out
in the March red book of 3.6% (including the additional cost
of the Treasury's pension rate) to £186.4bn, with more
needed if transfers already made are going to be
compensated.
Commenting on the analysis,
Sally Gainsbury, Senior Policy Analyst at the Nuffield Trust
said:
“This year, largely driven by an
inadequate budget settlement in March, the NHS has already had to
receive top ups from the DHSC budget, just to keep day to day
services running. But even with those top ups, the NHS is heading
for a significant overspend this year unless eye wateringly high
and historically unprecedented efficiency savings can be
made.
“At a time of extremely tight public
finances, it would be tempting to hope that a large funding
increase next Wednesday could deliver the reforms needed to
improve the NHS for the future. But this is a service that is
running to stand still. If it is overspent to the tune of £4.8bn
at the end of this financial year, this will likely mean further
cuts to non-NHS budgets like public health and technology,
achieving the very opposite of the laudable aims to prioritise
improvements in these areas, announced for the Government's
ten-year plan.”
Ends.
Notes to
Editors
