Responding to the Autumn Budget, Nuffield Trust Senior Policy
Analyst Sally Gainsbury said:
“Under today's Budget, day-to-day NHS spending is set to rise
2.2% next year, and while it has escaped cuts, this harks back to
the slow growth we saw under 2010s austerity. There are some
small boosts to pay for redundancies and new NHS tech. But with
this now set to be one of the tougher periods for funding in the
NHS's history, an awful lot is being asked from this modest
increase - from improving access to GPs in poorer areas, to
totemic pledges like reducing hospital waiting lists.
“As the OBR warns, the unresolved dispute between government and
the pharmaceutical industry is still looming large. If the
government concedes to pay higher prices for the same drugs, that
will either eat into today's settlement or divert funding away
from more cost-effective care like GP appointments, which give
patients much greater health benefit for every pound spent.
“Meanwhile, today's Budget has boosted the National Living Wage -
which will come as welcome news to the many social care workers
on low wages - but there's no new money to help the care sector
with the impact. With almost a quarter of the 1.5 million strong
care workforce paid within 10 pence of the Living Wage in 2024,
even small increases can have a big impact on the cost of
delivering care. We estimate that this increase could cost the
sector around £1.2 billion[1]. It is difficult to see how current
levels of investment will stretch to deliver even the planned
social care workforce reforms, let alone leave enough for wider
changes to England's broken care system.
“Social care is still in dire straits and the impact of last
year's Budget measures, including Employer National Insurance
rises, are beginning to bite. Ultimately, people who need care
and support will feel the effects as cost pressures continue to
increase.”
Ends.
Notes to Editor
- Note on calculation of NLW impact: Based on data from Skills
for Care, we use the relationship between the National Living
Wage (NLW) and the mean pay of employees of independent sector
adult social care providers in 2023/24 to predict hourly mean
wages. We use Skills for Care data from 2024/25 for the number of
part-time and full-time staff in the sector. Based on data from
Skills for Care and the ONS, we assume that the average full-time
employee works 37 hours per week and the average part-time
employee works 19.6 hours per week. Keeping these assumptions
constant, we apply the 2025/26 and 2024/25 NLWs to the model to
determine the increased wage bill.
