Ministers have rejected pleas from the health department for an emergency £1bn in additional funding to cover the rising cost of the industrial action taken by doctors, nurses and other staff members since December last year. On Wednesday, the NHS announced that it is giving £800m to health service trusts to help them pay bills obtained from strikes and prepare for the winter ahead.
Nevertheless, despite the NHS’s repeated requests for at least £1 billion in extra funding, none of the £800 million is new money from the Treasury or the Department of Health and Social Care.
Assisting the NHS
NHS chiefs were confident that after months of negotiations with ministers and officials, the service would get an unscheduled boost of at least £1 billion in new funding.
The health secretary, Steve Barclay, is also disheartened by the news. He has been on the Treasury to locate the £1 billion that NHS executives had made clear was the bare minimum required to assist hospitals in covering the additional expenses imposed by strikes, such as compensating employees to cover for coworkers on days of industrial action.
Of the £800 million, £600 million has come from NHS England using funds designated for various improvement projects, and the remaining £200 million is money that Barclay promised in September to assist the NHS in overcoming its annual winter crisis.
Given his extensive knowledge of the NHS, there was cautious hope within the organisation that Jeremy Hunt, the chancellor, would grant its request for in-year financial relief as he was aware of the constraints the NHS faced during his six-year tenure as health minister from 2012 to 2018.
Hunt and Rishi Sunak may now be accused of denying the NHS funding that it desperately needs in order to use it for tax cuts prior to the general election of the next year.
The estimated “fiscal headroom” (amount of money the government can decide how to spend before election day) is between £13bn and £15bn. An NHS official said: “A lot of Tory MPs would see giving the NHS £1bn extra as not a good use of that money, especially as so many of them see the NHS as a bottomless pit of money anyway, and particularly as so many of them want Hunt to be able to announce personal tax cuts.”
Integrated care systems
The 42 integrated care systems (ICSes), which are regional groupings of trusts, will receive an additional £800 million from the NHS. Many of these ICSes are expected to conclude the 2023–2024 fiscal year in debt, with some perhaps having overspent by more than £100 million. Rising medicine prices have added to their operation costs, in addition to strike-related expenses.
During the October 5 board meeting, NHS England’s deputy chief executive and finance chief, Julian Kelly, made it clear that the service needed government funding to cover the £1.1 billion in costs incurred by staff walkouts by the end of July alone.
In a briefing to the board he wrote that: “ICSes’ financial positions continue to be impacted by the ongoing industrial action, which is driving additional expenditure as well as impacting on efficiency delivery.
“Without further support for costs of industrial action there is significant risk that many systems will overspend this year. To the end of July we have estimated a cost impact of –£550m and described lost activity [cancelled operations] valued at a further –£500m.”
Last Saturday, Matthew Taylor, the chief executive of the NHS Confederation—an organisation that represents trusts—gave a clear indication of what the NHS expects. He said that trusts needed to have the unexpected £1 billion hole in their finances “plugged without delay”.
In the event that the funds were not forthcoming, there may be service reductions, he added. “If it cannot be compensated in full, the NHS will need to understand from the government how it intends to adjust expectations on what its services will deliver with the resources available.”
Final thought
It is understandable that chiefs are deeply disappointed by the government’s decision to reject the bailout, given that reduced NHS services are an unpleasant reality. While NHS England announced that it is giving £800m in existing funding to health service trusts, this comes at a detriment to much-needed improvement projects and the looming winter crisis that the NHS faces.
