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Autumn budget will not cut NHS funding

Experts predict decade of austerity for NHS from efficiency savings

Adrian O'Dowd

Friday, 06 December 2013

Doctors and other NHS staff are suffering real terms cuts to their pay despite fresh assurances from the government that the NHS budget will be protected.

Chancellor George Osborne, making his autumn statement yesterday afternoon said the health budget would be protected from the additional £1bn of cuts expected from the budgets of most government departments for each of the next three years.

The statement, a half-yearly update on the Chancellor’s Budget, said the overall deficit was down and predicted the economy would grow 1.4% this year but savings still had to be made.

Despite this, NHS funding would be protected, said Mr Osborne, adding that the rise in the state pension age to 68 would now begin in the mid-2030s instead of the original date of 2046.

The BMA, however, questioned the assertions over the NHS budget, and said the current £20billion of efficiency savings expected of the NHS by 2014-15 were being felt deeply.

BMA council chair Dr Mark Porter said: “Doctors and other frontline NHS staff are working harder than ever before, doing more with less against a backdrop of rising demand, fewer resources and real term cuts to pay.

“While the government claims the health budget is protected, in reality billions of pounds are going back to the Treasury each year and the NHS is also having to make £20billion in efficiency savings, the bulk of which is coming from the continued erosion of staff pay.”

The situation was unsustainable, he added, saying: “If the government doesn’t work with staff and other stakeholders to find innovative ways of delivering a cost effective health service then frontline services will be hit and, ultimately, the quality of patient care will be compromised.

“The combination of an overstretched workforce, a fall in real terms pay and the fact the government keeps moving the goalposts on pensions meaning doctors face working until they’re 70, has left morale in the NHS at an all time low.”

Health think tank The Nuffield Trust said a decade of austerity lays ahead for the NHS.

Its chief economist Anita Charlesworth said: “Today’s announcement that public spending as a whole will only grow in line with inflation in 2018-19 confirms that the unprecedented squeeze on NHS budgets is likely to continue over the next parliament.

“Although the health service faces upward cost pressures of around 4% each year, this tight fiscal picture and the deep cuts seen by other departments make it likely that NHS funding will not increase over this period. We have estimated that this will lead to a further funding gap of around £30 billion by 2021-22.”

In addition, the government had committed to looking at further public sector pay restraint after 2015-16, about which Ms Charlesworth said: “Although pay restraint has been crucial in the NHS meeting its financial targets so far, it will become very difficult to continue if the health service has to compete for talent with the private sector in a full economic recovery.”

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