The Spending Review and public health: the need for certainty in the shorter term and social value in the longer

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The Spending Review this autumn comes at a critical point in the pandemic, and in the economic cycle that has been rent asunder by it. This means the Spending Review has to do two things if it is to support public health: in the short term it must provide much greater certainty for critical budgets, and in the long term it must expect more from departments on social value creation and do all it can to protect against poverty and long-term unemployment.

The inevitable has now happened and the promised multi-year Spending Review has become a one-year emergency settlement. There are good reasons for this approach, given where we are. But some services and roles are so critical to the Covid-19 response and the trajectory out of it that decisions for them require longer-term commitment. The Chancellor has recognised this for some areas of spending, with promises of multi-year deals for the NHS, schools and infrastructure. Such a case could also have been made for public health. The cut to the real-terms value of local government public health budget (by almost 25 per cent per head between 2014/15 and 2018/19) was partly staunched in the most recent Budget but that increase was still far below the £1 billion per annum The King’s Fund and the Health Foundation called for in 2019 to restore the average spend per head to its previous level (as the Association of Directors of Public Health has also called for).

'Local public health teams have been at the epicentre of the local response to Covid-19. They require both an uplift, and more certainty over future budgets.'

Local public health teams have been at the epicentre of the local response to Covid-19. They require both an uplift, and more certainty over future budgets for three reasons: first to plan for the wider effects on their populations’ heath of Covid-19 and lockdown; second, frankly, to backfill and rebuild some of the key services in the public health grant that will have had to be put on hold due to the focus on Covid-19; and third to provide some stability in services in light of the changes to the wider public health system the government has announced. If more evidence were needed, it’s now clear that such a decision would be exceptional value for money as pound for pound local government public health services have a greater impact on population health than putting the same money into the baseline of the NHS.

But we can’t ask more of the chancellor and taxpayers alone. Public services need to step up too; they cannot continue to focus only on their direct objectives. This applies to the NHS as much as other sectors (and perhaps more so) given the huge proportion of the public purse it receives and will continue to receive in the Spending Review and beyond. This is not about putting more demand on the NHS, but asking it to be more intentional about its wider economic and social impacts, given its huge spending and employing power and what we now know about how this impact is connected to health. The good news is that NHS leaders increasingly recognise the need for this. The Spending Review needs to reinforce this further, tying the granting of additional resources to departments to the wider contribution to social value as well as direct objectives. The decision to strengthen the requirement to demonstrate, not just assess, social value in all government contracts from January is a welcome move in this direction.

The final ask is to rebalance the equation of the financial burden away from those at the most risk of poor health. As the Institute for Fiscal Studies showed, the last Comprehensive Spending Review in 2015 introduced tax and benefit changes that introduced a net drop of around £700 for the poorest 10 per cent of households, and £1,300 for the next 10 per cent poorest per annum over the course of the review period to 2019. There is a need to do more to avert the likely future wave of poverty that could lead to the biggest long-lasting health legacy of Covid-19 if not acted on now. As the Chief Medical Officer has pointed out, the pandemic and the response to it will have a significant impact on deprivation and will be economically disruptive, and this will have health consequences. The government has provided support to business and employment through the furlough and other schemes. But furlough is winding down, to be replaced by less generous policies, just as we seem to be entering the next phase of Covid-19 and the economy is disrupted again.

'There is a need to do more to avert the likely future wave of poverty that could lead to the biggest long-lasting health legacy of Covid-19 if not acted on now.'

Long spells of unemployment are exceptionally bad for long-term health, as well as future employment prospects, and increase the costs of public services, especially the NHS. So the Chancellor needs to do all he can to avoid this through additional measures in the Spending Review or the long-term impact of the pandemic, just like its short-term one, will be to exacerbate inequalities in health. Even under furlough the economic effects of Covid-19 have not been felt equally. In June 80 per cent of those in the bottom 10 per cent of the earnings distribution were in shut-down sectors or were not able to work from home, compared to only a quarter in the highest earning 10 per cent and the Institute for Public Policy Research forecasts suggest that more than 1 million people could fall into poverty by the end of 2020.

The overall ask then is for certainty in the short term, especially for local government public health budgets, an approach to departmental spending that is tied in more directly to social value creation and a strong focus on reducing poverty and unemployment . Let’s see what happens.

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