The Autumn Budget 2017

The reaction to the NHS proposals in last week’s Budget has ranged from “more positive than expected with genuine new money for the NHS” to “Mr Hunt has put himself and the government in direct opposition to the views of the NHS leadership”. Saffron Cordery shares 10 reflections on what was announced with a focus on what should happen next.

1. The Budget has caused a strong and diverse range of reactions in the NHS. To make sense of these, we need to separate out three different things – the actual proposals themselves, in the context of the Budget as a whole; how they measure up to what the NHS needs; and what the proposals mean for the NHS 2018/19 delivery task.
   
   
2. While pointing out that the budget proposals for health fall short of what is needed, the three independent health think tanks are reasonably positive about the settlement. They point out that the NHS asked for help in three different areas – extra revenue in 2018/19, extra capital, and funding any pay rise once the 1% pay cap is lifted. They rightly add that the NHS got “genuine new money” in all three areas.
   
   
3. This came despite the downgraded growth forecast from the Office of Budget Responsibility (OBR) which restricted the Chancellor’s room for manoeuvre on spending commitments. The NHS was the only public service to be treated anywhere near so generously. The budget reaction from the Local Government Association lends a helpful perspective - they clearly think the NHS has done very well.
   
   
4. It is important to acknowledge – as we did in our post budget reaction statement – that although the new funding is less than the NHS needed, it is also more than was expected. The extra money will help trusts as they strive to protect standards of care for patients. That is to be welcomed.
   
   
5. However, the shortfall in funding poses real problems. We have pointed consistently to the growing gap between what the NHS is expected to deliver and the funding settlement. We were pleased when others , including Simon Stevens, endorsed this analysis. Just prior to the budget the three health think tanks concluded that at least £4bn was needed next year to stop patient care deteriorating.The actual increase was £1.6 billion. So as we pointed out the NHS will not be able to meet rising demand, fully recover performance targets and consistently maintain high quality patient care in 2018/19. Some tough and difficult choices will now be needed.
   
   
6. The key immediate issue is what the difficult 2018/19 choices will be, how they are made and just what can be delivered on the enhanced financial envelope next year. Just over a month ago we warned that the NHS would “come under enormous pressure to recover the RTT and A & E performance standards – and much else besides – in return for any extra revenue funding”. And so it has proved.
   
   
7. This puts a strong focus on the somewhat enigmatic and mysterious process by which the NHS mandate is agreed between the Government and NHS England. This is how the 2018/19 delivery task for the NHS will be finalised and it will involve a set of decisions that have huge implications for patients. This means the Mandate agreement should be made more transparent,should involve other key players including NHS Improvement and the frontline leaders who will accountable for delivering what is promised. The process should be evidence-based and as objective as possible, reflecting the reality of demographic and other pressures, with a shared focus on achieving what is best for patients.
   
   
8. A key part of the debate will need to be around the relative importance of different priorities. One immediate concern is that earmarking the extra revenue for 2018/19 for A&E and RTT performance automatically prioritises the acute sector and those particular performance standards. This is likely to be at the expense of community and mental health and primary care – parts of the NHS that are also under huge pressure.
   
   
9. We must also recognize the importance of adequate funding for social care. This was an important omission in the budget with direct and damaging consequences for the NHS. The capacity and resilience of the social care sector is key to reducing delays in discharging patients who are ready to move on to other settings.
   
   
10. One final reflection on the actual content of the Budget proposals. NHS Providers has been arguing since June that the NHS needed more winter funding, particularly since it became clear that the extra 2017/18 social care funding was, understandably, not going to produce the consistent reduction in delayed transfers of care being targeted. Whilst the extra £335 million the Government has allocated is welcome it would have had a much greater impact had it been allocated earlier. We understand that the money is being assigned to NHS England and NHS Improvement’s joint Urgent and Emergency Care team for allocation and it’s important they set out as quickly as possible how it will be spent. The same applies to next year’s extra revenue and the linked delivery task. Leading a trust is a difficult job at the moment – the sooner we can give those leaders clarity on these issues, the better.

Read our Budget briefing.