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Cuts to public health spending: the falsest of false economies


Back in June, with no prior warning, the Treasury announced that the 2015/16 public health grant to local authorities would be reduced by £200 million. Last week, the Department of Health finally released the consultation on these ‘in-year savings’ (for the rest of us that means cuts).

Given the delay in doing so following the announcement, you’d be forgiven for thinking that it is an extensive, highly technical document setting out complex options. But it’s not – it’s 20 pages, including annexes. So why the delay? Why is the consultation open for just four weeks? And why does it take place in August, when many people are likely to be on leave? Presumably because it is already desperately late to be cutting in-year budgets – suggesting the cut caught the Department of Health by surprise. Not so long ago, the Department was trying to give local authorities planning certainty by issuing multi-year budgets – the contrast between this and an in-year cut could hardly be more stark.

We have set out our view elsewhere on the wisdom of cutting public health budgets, arguing that it will undermine commitments to prevention and discourage integration. And the consultation does answer some of the questions we posed there, including whether funding for public health services for children aged 0–5 – which is only being transferred from the NHS to local authorities from 1 October – can also be cut now that it is no longer protected by the NHS ring fence. The answer is yes, as long as statutory responsibilities are met. This may be sensible, giving local authorities maximum room for manoeuvre, but it sits uncomfortably with the government’s claim that these are ‘non-NHS’ cuts.

But to the meat of the consultation itself. The Department of Health favours the simplest option – translating the £200 million reduction in funding into a flat 6.2 per cent cut to all local authority public health budgets. The reason for this is primarily for simplicity, supported to some extent by personal soundings from those in local authorities who are already planning on this basis. But other options shouldn’t be dismissed: taking a larger cut from local authorities who remain above the target funding allocations defined by the Department of Health; or taking more from local authorities who carried forward unspent reserves from last year. More details are in the consultation.

In an eerily prescient move, Ben Barr and David Taylor Robinson looked at the potential implications of some of the options available. One option, not put forward by the consultation paper, would be to take less from local authorities with higher levels of need. On Barr and Robinson’s definition of inequality – the relative impact of the cuts on local authorities with different levels of deprivation – the Department of Health’s favoured option of a flat cut and the option of cutting on the basis of target allocations are both less equitable than cutting on the basis of need. Other options are also possible, including taking less from authorities spending more on demand-led services, such as sexual health, since they have far less discretion over what they do with their funding as it is. So, the devil really is in the detail.

Beyond the consultation, the next challenge will be the Spending Review. Remember, the ‘in-year’ cut is already on top of a cash standstill budget for public health in 2015/16. Yet, there is now growing evidence of the benefits and return on investment of local authorities’ public health spending, in areas such as the promotion of walking and cycling, and investment in housing. Many of the financial benefits flow to the NHS. Public Health England, urged on by the Public Accounts Committee, is prioritising the further development of return on investment information. This will be useful to local government no doubt, but central government and the Treasury need to receive feedback on, and be held to account for, their decisions in this area too.

We will be making it clear in our Spending Review submission that further cuts to public health spending and activity will be the falsest of false economies, not least for the NHS. System leaders Simon Stevens, Jeremy Hunt and Duncan Selbie have all emphasised the importance of prevention and public health – which are at the heart of the NHS five year forward view. The Spending Review will be a litmus test of whether this is taken seriously by government.