The new Conservative government's plans for the NHS are based on the long-term plan published in January 2019 and the funding plans are based on announcements made back in 2018, plus announcements on hospital building and infrastructure spending made more recently, and a small additional amount of money in order to help provide more GP appointments.
£20.5 billion funding over five years is not enough
Overall, the funding announced for the NHS from 2018/19 to 2023/24 amounts to a rise of £20.5 billion in real-terms, or 3.3% per year. The £20.5bn was announced by Theresa May back in the summer of 2018, to mark the 70th birthday of the NHS. The cash increase to follow this up was formally announced in the November 2018 budget.
All leading think-tanks (King's Fund, Health Foundation, Nuffield Trust, IFS) agree that this increase of 3.3% will not be sufficient to enable the NHS to modernise and improve care and address the workforce crisis as detailed in the long-term plan. The increase in spending will only be sufficient to maintain the current levels of care.
The Health Foundation damned the increased funding with faint praise, arguing that the money would merely “help stem further decline in the health service” and the Institute for Fiscal Studies described the planned increases in health spending as “modest in the context of easily the tightest decade for the NHS since its founding.” More details can be found on this page.
Public health and social care funding increase
The promise of £20.5 billion is only for NHS England, not for the Department of Health and Social Care as a whole. In September 2019 the funding for the other areas within the Department of Health and Social Care, including public health, IT, and training, were announced for the coming year 2020/21. The funding gives the Department of Health and Social Care a 2.9% increase, but this is nowhere near enough to reverse the impact of nine years of austerity. The Health Foundation has calculated that an increase of 3.3% is needed to maintain care and address the workforce crisis. The Health Foundation notes that this is "a spending round that papers over the cracks."
The amount allocated to public health, falls significantly short of the £1 billion required to reverse the five years of cuts.
The extra money announced for adult social care could amount to an additional £1 billion, however the Health Foundation notes that this only keeps pace with rising demand.
In November 2019, an IFS assessment of the Conservative's spending plans in the manifesto concluded that "Assuming that the rest of the health budget is frozen in real terms...overall spending on the Department of Health and Social Care would increase by 3.1% per year between 2019–20 and 2023–24."
The graph below shows how the £20.5 billion in extra funding matches up with previous years.
Its NOT £34 billion for the NHS
During the election campaign, many people would have heard Boris Johnson and his ministers touting a misleading figure for how much funding the Conservatives have promised for the NHS. The figure of £34 billion they cited is the difference between the 2018/19 figure of £115bn and the £149bn planned for 2023-24, but in reality - in real terms - the increase is much lower due to the effect of inflation. The actual increase is £20.5 billion, which Philip Hammond’s Budget statement made clear last year.
It is generally accepted that spending increases are always given 'in real terms' to allow for inflation. To cite an increase in spending in any other way is misleading.
From funding 40 hospitals to just six in a matter of hours
The promise of 40 new hospitals, made on the first day of the Conservative's conference in Manchester in September 2019 by Matt Hancock, Secretary of State for the Department of Health and Social Care, has been shown to be bogus. The announcement of £13 billion and 40 new hospitals, very quickly unravelled, with Prime Minister Boris Johnson, admitting on the BBC Andrew Marr show the morning of the announcement that all that was definite was £2.7 billion for six hospital trusts over the next five years. These six trusts already have plans in the pipeline for major refurbishments and rebuilds - none of the projects is a new hospital.
Truth behind Johnson's "40 new hospitals" claim
The six trusts are Whipps Cross hospital, Epsom and St Helier trust, West Hertfordshire trust, Princess Alexandra Hospital trust, University Hospitals of Leicester trust and Leeds Teaching Hospitals trust.
The announcement also set out a second phase of investment to deliver 34 hospital rebuilds between 2025 and 2030. These will be kick-started by providing £100 million of seed funding to support the development of business cases for 21 building projects around the country.
Experts welcome the money, but point out that it is not enough, particularly as the backlog cost of maintenance is over £6 billion, and such piecemeal funding makes planning difficult for trusts.
Anita Charlesworth head of research and economics at the Health Foundation think tank noted in The Guardian that:
“While this money is very much needed following years of underinvestment in the NHS’s crumbling infrastructure, it falls well short of the scale of the challenge. With a backlog of maintenance and repairs that amounts to more than £6bn - much of which threatens patient’s safety – and dozens of NHS trust upgrade projects that have been delayed or cancelled, the figure needed is closer to £3bn each year for the next five years. Such piecemeal funding makes it difficult for trusts to adequately plan their spending. What is ultimately needed is a substantial, long-term capital settlement which is allocated based on a clear assessment of the health care service’s needs.”
Richard Murray, chief executive of the King’s Fund, also noted in The Guardian that although the money sounds substantial its not the same as a proper multi-year capital funding plan.
“The lack of clarity around how the new schemes have been selected and how the pledges fit within the Department of Health and Social Care’s overall financial settlement makes it difficult to tell how generous the government is being.”
£1.8 billion pledge revealed as not new money
The August 2019 announcement of an extra £1.8 billion in funding for the NHS has also been shown to be misleading. The majority of the money, £850 million, will be primarily targeted at 20 hospital upgrade projects in England, with Scotland receiving £180 million, Wales £110 million and Northern Ireland £60 million.
The money was announced as in addition to the £20.5 billion long-term spending increase for the NHS announced in mid-2018.
However,
The backlog in maintenance is estimated by NHS Digital to be around £6.5 billion - that's how much it will cost to bring all hospitals up to standard. That cost does not include how much is needed to upgrade hospitals to make them fit for the coming years and to use new technology. Furthermore, the money promised by Johnson is targeted at just 20 projects - what happens to all those other trusts that are struggling with crumbling infrastructure and facilities barely fit-for-purpose?
In a Guardian article Prof Derek Alderson, the president of the Royal College of Surgeons, said he welcomed the additional investment but said the announcement was “like an absent landlord saying he’ll mend the shower, but the broken toilet, damp walls and dodgy electrics will have to wait. The NHS maintenance backlog bill stands at £6bn. Today we have £1bn towards that, but the question is how long it will take for the money to reach the frontline.”
An explainer on the capital budget can be found in our Lowdown publication.
Why are NHS hospitals and GP surgeries crumbling?
Once the details of this money were determined, its clear that this is not really new money at all.
Sally Gainsbury, a policy analyst at the Nuffield Trust, explained on twitter, how the money is money that the trusts have gained through implementing significant cuts to spending over the past three years.
Sally Gainsbury outlined how the trusts were told that if they cut their costs, they would receive a cash reward that could be spend on infrastructure, known as the Provider Sustainability Fund (PSF). Around 70 to 90 trusts cut their spending significantly, in return they were told they could have £2.3 billion in rewards, which could only be spent on capital projects. But the trusts spending also had to be within the budget for the Department of Health and Social Care (DHSC). So when the DHSC cut the spending limit for all trusts - the trusts that had worked so hard to reduce spending and gain the cash reward, were told they couldn't spend it as if they did they would take the total spending to over the DHSC spending limits.
Comments from other think-tanks and NHS organisations, show that although the money is welcomed, it is considered not nearly enough to have a major impact on the problems in the NHS.
NHS Providers, the organisation that represents the hospital trusts, noted "NHS Providers welcomes NHS capital investment but warns more is needed to deliver long term improvements" Chris Hopson, the organisation's CEO said:
“The longest and deepest financial squeeze in NHS history and rapidly rising demand for health care have left NHS frontline staff with a series of challenges they’re struggling to meet, despite working flat out. Those challenges include a crumbling estate, ageing equipment, 100,000 staff vacancies, pension rules that penalise many staff who work extra hours and a social care system in crisis. Taken together, this is leading to lengthening waiting lists and poorer patient care, despite the NHS treating 5% more patients this year than last."
The Health Foundation, think-tank, tweeted:
Danny Mortimer, deputy chief executive of the NHS Confederation, a membership organisation for commissioners and providers of NHS care, and chief executive of NHS Employers, said:
“The Prime Minister’s promise of another £1.8 billion for the health service to buy vital new equipment and upgrades of facilities is clearly welcome. This money is desperately needed to modernise services and working environments and improve the quality and efficiency of patient care. Spending on NHS buildings, equipment and digital technology is half the OECD average and woefully inadequate. There is a huge logjam of cases for investment in the NHS and there are many old buildings that cannot be adapted to deliver modern patient care."
And the think-tank The King's Fund said:
