Anticipating the Spending Review

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Former New York governor Mario Cuomo once said that politicians campaign in poetry but must govern in prose. As we enter the autumnal season of 'mists and mellow fruitfulness', few expect much poetry when the government announces the outcome of its major spending review on 20 October.

The emergency budget in June gave a glimpse of what was to come, indicating what the Institute for Fiscal Studies (IFS) has described as 'the longest, deepest sustained period of cuts to public spending at least since World War 2'. The government has pledged to ring-fence the NHS budget from real-terms reductions, so in one sense the spending review is a done deal. Or is it?

The prospects for other public services are dismal, with 'non-protected' services facing reductions of 25 per cent over the three-year spending review period. These include local government and social care, which should ring alarm bells for the NHS. Seasoned readers will remember when 'winter pressures' crises were an annual fixture in the health and social care calendar, a grim choreography of queuing ambulances outside A&E, trolley waits and cancelled admissions. With many councils planning substantial budgets cuts from next year, it's no wonder that concern is mounting about the impact this will have on the ability of the NHS to manage its own financial challenges – at the same time as it is being 'liberated' by the White Paper reforms.

Evidence is growing that without an adequately funded social care system, the NHS will grind to a halt. More people will end up inappropriately in the most expensive parts of the system – acute hospitals and care homes – and get stuck there waiting for inadequate community services. And many of the wider local government services contribute directly to the health and wellbeing of the local population and will be crucial in addressing the rising tide of chronic illness. None of these services are likely to be protected in the spending review, but all are essential in delivering the right care, in the right place at the right time. The risks are real but simply raiding the NHS budget to bail out social care is not a sustainable solution and may make matters worse. Even with a real-terms rise, the NHS could face an eye-watering productivity gap of around £21 billion by 2013/14 – ring-fencing will not exempt the service from the age of austerity.

So what can be done? Long-term reform of social care funding awaits next year's recommendations of the commission on care and support, but in the meantime there are several ideas the spending review could consider:

  • assess the long-term resource needs of health and social care as a single whole system, not as separate services
  • synchronise the timing of financial settlements for the NHS and local government to make it easier to configure joint planning of resources
  • adopt rules for engagement to prevent local unilateral decisions and encourage sensible joint management of service pressures
  • make a stronger push towards pooling of budgets for older people (where progress has been slowest)
  • increase NHS spend on key social care services such as reablement that impact directly on patient experiences and outcomes.

If the government wanted to be really radical it could replace the current separate funding systems with a place-based approach and move towards a single, local integrated budget for health and social care. That would be a powerful commitment to localism and to the integration of health and social care. It would require the government to trust local health and local government partners to deliver. But will it, and will they?

This blog also appeared on the Health Service Journal website.



Consultant Physician for the elderly,
Comment date
10 September 2010
I agree with the comments that this may affect the elderly badly unless there is more cooperation between health and social services. In the short term, before the winter, it need to be addressed between the social services and the PCT how we can work together and have systems and groups who can make this work at the patient level. It is paramount that these discussions start soon and workable arrangements are explored.

Sandie Keeene

Comment date
13 September 2010
I agree with the comments. It will be important to develop levers to drive Health and Social Care together. Any artificial redefinitions of Health or Social Care to move the money accross sectors ( eg making reablement or mental health a health financial responsibilitymay put a negative focus on 'boundary' issues and reinforce differences. An approach re 'total place' and outcomes should drive shared responsibility and pooling of budgets.

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