Emergency Budget: NHS saved from cuts but still under pressure
NHS finances will come under increasing strain over the next four to five years, in spite of confirmation by the Chancellor today that he would protect real funding increases throughout the course of the next Parliament.
In the Emergency Budget, the Chancellor said the government would honour an earlier pledge to ring fence increases in health service funding in real terms. Other government departments, however, have not be spared drastic cuts which Osborne said were being made in order to correct the previous administration's economic mismanagement.
The Budget figures announced today imply that most government departments will face an average real cut of around 25% over four years. The NHS Confederation, which represents NHS employers, said that although the NHS budget has been largely protected, it is likely that over the next five years cuts to other areas, such as local authorities, may have an impact on health expenditure.
NHS Confederation chief executive Nigel Edwards said: "Although health spending will continue to rise year on year, all NHS trusts will find they are challenged to do more for the money they have."
Edwards said that all NHS trusts are aware of the collective £15-20bn of efficiency savings that are required over the next five years. He also pointed out that an increase in VAT from 17.5% to 20% next year will hit health service coffers.
"The task for the whole NHS is now to respond to the challenge presented by the financial squeeze that lies ahead - but it will require decisions regarding redesign of services and improvements to the service we provide to patients," Edwards said.
Although the NHS was not hit directly in the Budget, some activity in the health service has already come under review or been curtailed.
That activity included plans for a new hospital for Hartlepool and North Tees, which were dropped this week as part of a package of cuts to "unfunded" programmes.
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