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At the beginning of this week the government announced a major u-turn in health policy, ending a long period of very low growth in the NHS budget with a promise to increase funding by 3.4 per cent every year. The numbers sound impressive, with an extra £20 billion a year expected by 2023/24, but as always, the devil is in the detail. The increase remains below what the BMA and many policy experts believe is needed, and some of the reporting around the announcement – including the supposed ‘Brexit dividend’ – has added confusion rather than clarity to the issue.
What has actually been announced?
The NHS England budget will rise by an average of 3.4 per cent (in real terms – i.e. on top of inflation) each year for the next five years.
Importantly, the rise doesn’t include some areas of spending such as public health, capital investment, and medical education and training. Factoring in a lack of growth in these areas, the overall increase will be closer to 3 per cent. Another major drawback is that social care – which has experienced huge cuts in recent years impacting on the NHS – is also not included in the rise.
A new ‘ten-year plan for the NHS’ will now be developed. Details on what this will include are sketchy, but the government will consider whether legislative reform is needed – potentially opening up an opportunity to review wasteful competition regulations.
How significant is it?
There’s no doubt that this is a major increase for the NHS – but that probably says more about the severity of the recent funding squeeze than anything else. Clearly, more funding is welcome and is desperately needed, with recent BMA analysis showing that the last winter was one of the worst on record for the NHS, and intense pressures are now a year-round phenomenon. The government’s change of heart owes a lot to the successful campaigning of many thousands of people who care about the NHS, both individually and through organisations such as the BMA.
Unfortunately, despite this the government’s 3 per cent rise still falls short of what is needed. There are three ways of looking at this:
The Prime Minister has talked about the new funding creating an opportunity for a ‘profound transformation’. There is a big risk that such rhetoric will create expectations that this modest funding rise – on the back of eight years of damaging austerity – won’t meet.
So what’s all this about a ‘Brexit dividend’?
When news of the funding increase first broke, the headlines focused heavily on the idea that the money would come from a ‘Brexit dividend’.
Setting aside the politics of Brexit (if such as thing is possible), this claim does seem to have unravelled pretty quickly. There isn’t space to go into detail here, but independent fact checkers at Full Fact have concluded that ‘there is no guaranteed extra money to pay for increased NHS funding from stopping our payments to the EU budget… other costs associated with Brexit are expected to outweigh the savings’.
So where will the money come from? This isn’t fully confirmed yet, but it’s likely to involve tax rises and possibly extra borrowing.
The BMA will press for doctors to be at the heart of decisions about how the new money is spent, to ensure it reaches frontline services as quickly as possible. In addition, we’ll be pressing for competition and procurement regulations – which are diverting funds that should be used for patient care and creating unnecessary barriers between services – to be rescinded.
The BMA’s new ‘Caring, supportive, collaborative’ project will also inform our thinking. This aims to create space for an honest conversation about the sort of NHS we want and the priorities for how new investment should be used. And the BMA will of course continue to push for increased funding for the NHS, so that we catch up with comparable European countries.
More funding is definitely good news for the NHS. But make no mistake – we’re not out of the woods yet.
Jon Ware is head of health policy at the BMA
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