NHS budget boost ‘does not go far enough’

Philip Hammond is to give the NHS an emergency cash injection in the budget, though it will be far less than health services bosses believe is needed.

Hammond is understood to be planning to give the NHS up to £6 billion by 2022 for three different purposes. He is thought to be ready to give the NHS around, but less than, £1 billion more than previously planned in 2018-19 to meet its running costs and to maintain care standards.

Hammond is also expected to announce that the NHS in England will receive an extra £1 billion yearly for the next four years in capital funding - used to build new NHS premises, undertake repairs and buy new equipment.

However, that is £6 billion less than the £10 billion extra capital funding Prime Minister Theresa May promised during the election campaign.

Hammond may indicate that selloffs of NHS land and property can plug most or all of that gap.

Sources predict that Hammond will also indicate that the government will give the NHS some further money to help cover the cost of the pay rise of its 1.4 million staff next year now that the one per cent pay cap will be ended.

He is likely to say that the exact sum the Treasury will provide will depend on what the two NHS pay review bodies recommend. But sources predict that Hammond’s pledge could ultimately yield several hundred million pounds for the NHS as each one per cent rise in staff pay would cost £500 million.

Informed sources say that Hammond and May accept that they have to give the NHS more than the £124.4 billion planned in 2018-19 in order to avoid breaking the Conservative manifesto pledge that health spending per head would grow every year of this parliament. To avoid breaking this promise, funding needs to grow by at leas £310 million.

Chris Ham, chief executive of the King’s Fund health thinktank, said: “If these numbers are confirmed, they will provide some relief to an NHS struggling to meet rising patient demands with budgets that have been constrained for eight years. However, they fall well short of the £4 billion increase we estimate is needed in 2018-19 to prevent standards of care falling further.”

Chris Hopson, chief executive of NHS Providers, said: “The economy as a whole has seen average productivity gains of 0.2 per cent a year over the last five years. The historical NHS average has been one per cent a year. Thanks to the hard work of trusts, we’ve significantly exceeded both these – realising an average productivity gain of 1.7 per cent a year between 2009-10 and 2014-15.

“And we mustn’t forget that the spending review plans already assume productivity gains of 2-3 per cent a year between now and 2021. Is it really credible to argue that a significant level of further gain can be realised? Or is this a way of justifying a decision not to make the extra investment in the NHS that is needed?”