Budget 2021: what you need to know

Chancellor Rishi Sunak delivered his budget to Parliament on 3 March. Our briefing covers the need to know aspects for doctors and the NHS and our analysis.

Location: UK
Audience: All doctors
Updated: Thursday 4 March 2021
NHS Structure Article Illustration

Missed opportunities

This year's budget is a missed opportunity to announce vital support for the NHS and its workforce.

No additional NHS funding for COVID-19

Last year, the chancellor set out that Government would give the NHS 'whatever' it needs to get through the COVID-19 crisis. However, this budget failed to mention any significant additional funding for the NHS to cope with the impact of COVID-19 or ensure the sustainability of the NHS.

The BMA wrote to the chancellor ahead of the budget to highlight the need to increase core funding for the NHS beyond 2021/22 by at least 4.1% to help it cope with increasing demand. This would take core health spend to £174 billion by 2023/24.

Backlog of non-COVID care

We also know that the backlog of non-COVID care is continually growing.

The BMA estimates that between April and December 2020, there were between 989,000 and 1.3 million fewer first elective treatments than would normally have been expected. This is potentially costing the NHS between £4 billion and £5.4 billion to work through.

The comprehensive spending review in November 2020 announced £1 billion to go towards clearing the backlog of elective care. This falls far short of what is needed and we are extremely disappointed that this budget did not take the opportunity to announce further support.

No additional COVID funding for general practice

In addition, we are disappointed with the omission of COVID funding to support general practice in the budget.

Last year, Government provided a £150 million COVID capacity fund (from October 2020 to the end of March 2021). This was to expand the general practice workforce and help practices working on the seven COVID-19 priority areas.

We, alongside the RCGP, wrote to the chancellor to call for these funds to be extended, and further funding to be provided to enable general practice to continue to deliver an effective and rapid vaccination programme, alongside continuing to deliver routine services.

The nation’s recovery from the pandemic will not be possible without investment in the general practice workforce.

Investing in staff

Investing in staff now is crucial to allow us to build a workforce for the future and meet the challenges that lie ahead. This should have been a key focus of this budget.

We need many more places in medical schools to help train a future workforce and our current workforce needs support to heal from this pandemic.

Our letter to the chancellor highlighted the need for Health Education England to be provided with funding beyond the amount provided in the spending review in November 2020. This would ensure more doctors are available and can tackle the growing backlog on non-COVID care.

Estimates suggest around 7,500 additional medical school places are required by 2023/24. Data from the DHSC’s own estimates suggests this amounts to at least £3.5 billion per annum on medical school placements alone. 

Healthcare workers' pay

The budget also failed to address the need to reward healthcare staff appropriately.

The BMA has consistently called for Government to commit to a significant pay uplift for all doctors across the UK. This goes well beyond inflation and helps address the real terms pay cuts doctors have faced in recent years.

It is vitally important that Government recognises the sacrifices of all doctors fighting the pandemic and rewards them accordingly. As well as training more doctors, we must fairly reward and retain the ones we have.

Since 2008, doctors have had pay freezes, caps on increases and below inflation pay increases. As a result, the medical profession has seen the biggest drop in real terms pay compared to all other pay review body professions. Some doctors have seen an over 30% fall in real terms take home pay.

72% were more likely to retire early should the Government freeze the lifetime allowance threshold

BMA survey, February 2021

Pensions tax and personal allowance

Vaccine rollout

The budget announced that an extra £1.65 billion will be allocated to help the Government reach its target of offering a first dose of the COVID-19 vaccine to every adult by 31 July 2021. Further announcements for the vaccine rollout include:

  • £28 million to increase the UK's capacity for vaccine testing, support for clinical trials and improve the UK's ability to rapidly acquire samples of new variants
  • £22 million for a study to test the effectiveness of combinations of different COVID-19 vaccines and the effectiveness of a third dose
  • A further £5 million on top of a previous £9 million investment in mRNA manufacturing, to create a 'library' of vaccines that will work against variants for rapid response deployment
  • Extending £500 test and trace support payments for those in England told to self-isolate due to COVID-19 until the summer.

BMA view

It is unclear if these additional funding announcements are included in the £1.65 billion fund to ensure the vaccine is offered to all adults by 31 July. This is something Government needs to clarify.

Greater clarification is also needed on how this funding will be spent and if it will be provided to general practice to support the vaccination programme rollout.

Despite these announcements, the Government’s spending plans show no clear plan for COVID-related costs beyond 2021/22. The roadmap does recognise that annual vaccination programmes and continued testing and tracing are likely to be required.


Income support

A temporary £20 per week increase to the universal credit standard allowance will be extended to September 2021.

Government will make a one off £500 payment to eligible working tax credit recipients.

The furlough scheme will be extended until the end of September 2021 with 80% of salaries continuing to be paid by Government. The scheme will change as the economy reopens, with employers expected to pay 10% towards the hours their staff do not work in July, rising to 20% in August and September.

The Government confirmed that the fourth SEISS (self-employment income support scheme) grant will be worth 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500 in total.

BMA analysis

These support schemes have been a lifeline for many during this period. It is welcome that both the uplift in universal credit and the furlough scheme have been extended beyond the planned end of restrictions.

Poverty and poor health go hand in hand, and the added security these measures have provided so far serve as excellent examples of how to reduce health inequalities. 

More than one in five people were living in poverty in the UK before the pandemic arrived. The UK’s lowest-paid workers are more than twice as likely to have lost their jobs in the pandemic as higher-paid employees. As women, ethnic minorities and people with disabilities are more likely to work in lower paid jobs, people in these groups risk higher rates of deprivation as a result of the pandemic.

The Government’s agenda of building back better in the wake of the pandemic must acknowledge that income insecurity is affecting the most disadvantaged. Any policies it can enact to ease that burden must be a priority.


Public and mental health

Visa reforms

The Government will implement a new elite points-based visa and introduce a simpler application process for highly-skilled visas, particularly for those working in academia, science, research and technology.

This is in an effort to improve the immigration system to help the UK attract and retain the most skilled talent.

BMA analysis

The BMA remains concerned about the impact of the loss of freedom of movement, following Brexit, on the mobility of health professionals and medical researchers.

We, however, welcome the Government’s commitment to attract international workers in academia, science, research and technology through reforms to the global talent visa, and to modernising the immigration sponsor system for all routes.

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