Just how secure is the ring-fence around NHS funding?

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October 19, 2010 by sharonbrennan

We’ve all been told since the election that
NHS funds are going to be protected and more often than not we breathe a sigh of relief and conversations move on to think about areas such as defence, policing and justice which are under scrutiny. But should we just accept what we are told about NHS funding?

Looking into the figures more, it looks like belt-tightening is going to hit the NHS significantly. The King’s Fund, a think tank focusing on health, has written a great blog post about this very subject, I’m not going to replicate it but just draw out some of its most interesting points.

It argues that in the past the NHS budget has increased by 6 per cent on average, but going forward that looks more likely to be reduced to a 1 per cent increase. In addition, the baseline on which to measure an increase has been reduced. In the 2007 Comprehensive Spending Review, spending for 2010/2011 was projected to be £109.8 billion. By 2009 expected spending for this period was reduced to £105.8 billion. Its always easier to find an ‘increase’ in funding for 2012, if the last year’s funding is £4 billion less than demanded. In short, with these increases, the NHS can only do all that it currently does if there is no extra demand on its services. And that seems highly unlikely.

Ignoring the fact that we are facing an increasingly old and obese population, the real concern for me is the reduction in social care spending. There are suggestions that £400 million of NHS funding could be transferred to social care spending, although we’ll have to wait until tomorrow’s Spending Review to see if that is confirmed. Not only would that mean that in reality the NHS will lose a chunk of its money, but in addition, the institute for Fiscal Studies expect local authorities to lose 33 per cent of funding by 2014/2015.  It’s clear that if social funding is heavily reduced – meaning that elderly people and those with long-term health conditions have community care removed – the pressure on hospitals will be immense, as admissions creep up and patients stay in hospital for longer as care they would normally receive at home is removed.

This is really false economics. In July this year the Nuffield trust said unplanned emergency hospital admissions had increased by 12 per cent since 2004, at a cost of £330 million per year.  Speaking at the time, Nuffield Trust director Dr Jennifer Dixon said: “Reversing this unsustainable rise in emergency admissions must be the number one priority for the NHS – any reform to the health service that does not tackle this will fail.” So you can see that a decline in local social care funding will have a direct impact on the NHS, which won’t have its funding increased in line with the rising cost of the problem.

And some of the fall-out is already being seen. NHS Warwickshire has delayed IVF treatment until next April to ensure it doesn’t overspend its budget. It has also postponed hip, knee and shoulder replacements and cataract operations. It is unacceptable that some Trusts see the best way to balance books as limiting what treatment is available year-round. It basically means that there are good times of the year to fall ill and bad times – and I would hate to be the surgeon trying to work out how best to get through a six month back-log of operations. How convenient that Health secretary Andrew Lansley abolished NHS waiting lists earlier this year.

I appreciate that there is not an endless pot of Government money and that spending reductions have to be found somewhere – but it seems pure political game play to ring-fence the very emotive issue of the NHS, and yet allow such significant cuts to areas that will directly increase the demands on the NHS along with how efficiently its money is spent. Like those people who live in the NHS Warwickshire catchment area, just pray you don’t get the wrong type of illness at the wrong time of year, otherwise you could experience first-hand how weakly constructed the Government’s NHS ring-fence really is.

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