Jeremy Cooper

Health, care and the Chancellor’s budget

November 1, 2017

We read with interest the letter sent to the Chancellor and co-ordinated by the NHS Confederation ahead of this month’s Budget.

A positive and immediately striking aspect of the joint letter is the growing consensus that we must address health and care together. The range of signatories is powerful: NHS Confederation, Association of Directors of Adult Social Services, Academy of Medical Royal Colleges, Carers UK, NHS Providers, Richmond Group, and the Royal College of Emergency Medicine.

The signatories have what adds up to a bold ask:

  • Revisit spending plans – a more even spread of the manifesto £8 billion over five years could be interpreted to be an ask for another £2 billion over the next five years
  • Provide proposals for sustainable social care funding – the tricky Green Paper, promised for this autumn, ideas tested and abandoned during the election, now promised for the “new year”
  • Ring-fenced transformation funding – £2 billion for each of the next two years
  • Relax pay restraint – and cover the costs
  • Deliver manifesto-promised capital investment

In among the specific asks, there is a reminder of the Office for Budget Responsibility’s assessment that the NHS has pressures of £30 billion over the next five years. The spend on health and care as a proportion of GDP is already lower than that of many developed countries and is falling.

For HM Treasury, surely a big question in response will be what has happened to all of the money we have committed so far, most recently the additional £2 billion for social care that we pledged in April? From our Collaborative programme working with a number of partner local authorities, we have some fascinating insight on both what is being achieved with the Improved Better Care Fund and the organisational, practical and political barriers to achieving more.

On the request for transformation funding, it is intriguing that the coalition asks specifically for a ring-fence – acknowledging the powerful pressure to plug the short-term gap with money. We agree that transformation funding is essential. My colleagues recently attended a King’s Fund event and were struck by the evidence from the Israeli health and care system, where better outcomes are achieved with half the spend per head. In our view, the most important impact of the funding is for us to talk properly about managing demand.

There is a danger that focusing on hospital discharge through the winter will take eyes even further away from contributing factors, including a lack of prevention clogging up primary care. We know that 50% of people attending A&E receive no treatment. We recently published our own analysis showing that there is some £3 billion of avoidable demand in social care. We are still looking at the evidence within the NHS, but the value of addressable demand is likely to be more than £10 billion. More money is certainly necessary, but we keep proving that it isn’t sufficient by itself.

If you would like to share thoughts on levels of avoidable demand in health and care, or insight on transformation funding, please get in touch, either with myself or with my colleague Sarah Atkinson.

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