Responding to the Comprehensive Spending Review, John Appleby, chief economist at The King's Fund, said:
'Compared to other departmental budgets the NHS settlement is a generous one. But, while the increase in health spending meets the pledge to protect the NHS budget, an increase of 0.1 per cent a year in real terms will soon be swallowed up by cost pressures such as incremental pay drift and the increase in VAT. The net result will be a reduction in the NHS’s purchasing power.
'This places even greater emphasis on finding the £20 billion in productivity gains targeted by the NHS's Chief Executive – the status of this has moved from an ambition to a commitment. Our work has highlighted opportunities to improve efficiency at every level of the health system. Delivering on this represents the biggest financial challenge the NHS has ever faced but it is imperative if it is to maintain quality and avoid cutting services.
'The £1 billion increase in grant funding for social care could provide some respite for hard-pressed local services and buys time while the Dilnot Commission works on a long-term funding solution. But this money is not ring-fenced so there is no guarantee it will be spent on social care.
'Used wisely, the additional £1 billion from the NHS budget to break down the barriers between health and social care provides a real opportunity to improve service delivery and save money by, for example, reducing the length of time patients spend in hospital. Again though, with the ring fence on local authority grant funding having been removed, and local government funding slashed overall, it remains to be seen whether this translates into increased funding for social care services.
'The commitment to ring-fence funding for public health makes good on the commitment made by the Conservative Party in opposition. There is no detail though about how much funding will be provided, or where it will come from – this will presumably follow in the public health White Paper due to be published later this year.'
Notes to editors:
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