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The Autumn Statement: playing with fire?


The public, understandably, is not happy with the state of either the NHS or social care. The health of the population is also not looking good. The deep-seated malaise in the health and care system did not happen overnight and, equally, will need a long-term plan to enable its recovery.

With the publication of the NHS long term workforce plan as well as radical new commitments made to reducing the harm from tobacco for future generations, we have started to see some welcome long-term thinking on these challenges. While there remains a sizeable list of long-term decisions still to be made (on capital, digital, inequalities, and more), the general lack of long-term planning over the last decade means that, as winter approaches, it is impossible to ignore the immediate and short-term challenges, and attention is turning to the Autumn Statement.

November’s Autumn Statement comes at a perilous moment for health and care services. More and more NHS organisations are slipping into financial deficit, progress on tackling waiting lists is stalling, and industrial action from key elements of the workforce continues. As local authorities run into increasing financial difficulty, directors of adult social care services are warning that they will fail to meet their statutory duties and will have to cut back care services. Even without the pressures specific to 2023, it is not unusual for government to become nervous as winter approaches and to suddenly find some additional funding to enable the NHS and social care to buy up additional capacity, though this often comes too late in the day to be made best use of. (Though to be fair, some of this winter money was announced in good time for 2023.)

Given the resources already provided to health and care – as well as the pressures elsewhere in public services and, indeed, the desire for tax cuts – the government might feel aggrieved at once again having to find more money. It is also true that the NHS does not have a great track record of financial planning. Hard financial targets have sometimes led to overly optimistic plans, with underperformance arising later in the year as reality bites. Yet this year it remains true that when budgets were set for the health and care sector, they did not include the costs of industrial action or persistent inflation. Estimates vary as to just how much money is needed to meet these unforeseen commitments but by the end of August NHS England was already estimating a total system deficit north of £1 billion, the majority of which they believe is due to the cost of strikes– and industrial action has continued since then. If this is correct, it would mean a full-year effect difficult for anyone to manage.

The Autumn Statement is set for 22 November. As noted, the NHS has ratcheted up a lot of deficits already and these appear to be rising. It will also have established detailed plans to try to manage the anticipated winter crisis, of which additional ‘escalation’ beds are perhaps one of the more obvious measures. The hope is that these plans can make winter 2023/24 less awful than last year’s. The risk to the NHS, to government and most of all to patients, is that if no more money is forthcoming then the NHS may have no choice but to abandon some or all of its winter plans in order to reduce the potential deficit. Aside from the obvious risk of worsening any winter crisis in health and care, it is hard to see how the optics could be anything but dreadful – as winter begins to grip, waiting times rise, the NHS (and local government) step down planned additional capacity and curtail planned use of agency staff and all the other mitigation measures developed over the year.

In this gloomy scenario, while it may be too late for the government to make the coming winter any easier, it may still be able to make it a lot worse. It could also present the NHS with a difficult decision: deliberately overspend despite being ordered to stop, or follow orders and watch as services slide further into crisis and patients and users suffer the consequences. The former would maintain services but potentially mean the NHS (and Department of Health and Social Care) busts its budget, the latter preserves financial discipline but not patient care. The likely outcome is probably somewhere in between. Local government must balance its budget so it doesn’t face this choice, though of course it does face the consequences of pulling back spending.

Winter and its associated pressures are always hard to predict – this year the risks of flu, Covid-19, norovirus and the weather are likely to interact with an already highly stressed system to make that even more true. It would be a brave government that adds to those risks.

The cycle of annual emergency funding for the NHS based on a series of short-term plans is no way to run a health service, or social care system, efficiently. We need to get back to a place where the health and care system does not face a meltdown every winter, but that requires long-term decisions that can bring demand, capacity and efficiency back into better balance. For now, the short-term decisions still really matter.