It would have made little difference but “Extra NHS cash vow ‘unravels'”… according to Labour

Update 24th December 2015. The Guardian Reports: Most of extra £3.8bn NHS funds already spent, says expert – King’s Fund economist backs Labour claims that NHS trust deficits and pension costs mean little of the extra money will be available for better care

BBC news reports 23rd December 2015: Labour: Extra NHS cash vow ‘unravels’

And yes, the money is already spend, as all trust are overdrawn. No business would be allowed to continue in these circumstances unless it was backed up by state funds…. Co-payments and rationing should be fairly distributed, and not related to whether or not your local District General Hospital has an NCP managed and charged car parking facility.. (Some make millions…) John Appleby (Kings Fund economist) virtually confirmed that the money was already spent on Radio 4.. This sort of money makes little difference to the philosophical debate, which we are not having.

The government’s promise of a £3.8bn financial boost for the NHS in England next year has “unravelled”, the Labour Party has said.

The above-inflation cash injection represents a rise of nearly 4% on NHS England’s £101bn front-line budget.

But Labour said the money would be swallowed up covering hospital deficits – which are expected to reach £2bn this year – and higher pension costs.

The government said Labour’s assumptions were wrong.

“We’re helping hospitals improve finances with tough controls on agency staff and management consultants and introducing some cost-saving measures identified by the government efficiency adviser Lord Carter,” the Department of Health added.

Chancellor George Osborne announced the additional £3.8bn in real terms on top of NHS England’s £100bn-a-year budget in the November spending review.

Chief economist from health think tank The King’s Fund, John Appleby, said that although the NHS would get an increase in funding, it had “in effect, already spent the money”.

The health service faced an “unprecedented” challenge, and would be starting the year with a deficit, and with extra costs ahead, he said.

Graph showing how NHS budget is increasing in England

Labour says that £2.2bn will be swallowed up by deficits at hospitals and other NHS trusts.

That figure is the total overspend projected by trusts this year, which Labour argues will continue in 2016-17 because of the intense financial pressures on the health service.

Labour says that on top of that, NHS employers will have to fork out more for employee pensions.

‘More spin’

The lower national insurance contributions they currently pay for staff who have opted out of the second state pension will be abolished. A new single state pension will be introduced, which will mean higher employer contributions.

Quoting a parliamentary answer, Labour says that the pension reforms will cost NHS employers a further £1.1bn a year.

Adding that to the £2.2bn for covering trust deficits, Labour argues, means that much of the extra cash allocated for the NHS is already spoken for.

And that, says the party, leaves little to cover the anticipated increase in patient demand and the cost of government plans to extend NHS weekend working.

“George Osborne’s promise of extra money to the NHS is more spin than substance,” Labour’s shadow health secretary Heidi Alexander said.

“The scale of the financial challenge facing the NHS means that there are now real doubts about whether this money will be sufficient to repair hospital finances, let alone deliver the Tories’ promise of a ‘seven-day NHS’.”

But the Department of Health questioned Labour’s figures.

Officials said it was wrong to assume that the £2.2bn total projected deficit for trusts this financial year would continue through next year. They said trusts would continue to make efficiency savings which would reduce the level of overspending.

By 2020-21 the total NHS budget will be £119.6bn – a rise of £8.4bn once inflation is taken into account – meaning the government will have kept its manifesto promise.

Labour’s critics point out that the party did not match the Conservatives’ election pledge to raise NHS spending in England by that amount.

Labour said it only offered voters “fully costed” spending commitments.

The doctor understands the threads of Health Service funding. The patient does not.


This entry was posted in A Personal View, Rationing, Stories in the Media on by .

About Roger Burns - retired GP

I am a retired GP and medical educator. I have supported patient participation throughout my career, and my practice, St Thomas; Surgery, has had a longstanding and active Patient Participation Group (PPG). I support the idea of Community Health Councils, although I feel they should be funded at arms length from government. I have taught GP trainees for 30 years, and been a Programme Director for GP training in Pembrokeshire 20 years. I served on the Pembrokeshire LHG and LHB for a total of 10 years. I completed an MBA in 1996, and I along with most others, never had an exit interview from any job in the NHS! I completed an MBA in 1996, and was a runner up for the Adam Smith prize for economy and efficiency in government in that year. This was owing to a suggestion (St Thomas' Mutual) that practices had incentives for saving by being allowed to buy rationed out services in the following year.

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