See our latest quarterly monitoring report.Catch up with our Spending Review submission.If this is the situation as we come to the end of the 2010 Spending Review period, what will be the position in another five years? Headline waiting times standards for cancer and in emergency departments, for example, are now missed routinely, the target minimum wait for diagnostic tests has not been met for the past 18 months, and though now abandoned, the admitted elective waiting time target was missed in 14 of the past 18 months. As a result the NHS is struggling to meet its obligations to patients. Increases in spending are increasingly falling behind increases in demand and costs, as well as the NHS’ ability in the short-term at least to make ends meet through productivity improvements. The huge overspend NHS providers recorded in the first quarter of this year was due neither to a lack of reform nor a reluctance to reduce waste and improve productivity. And forecasts of providers overspending this year by more than £2 billion in England suggest the NHS has reached the end of the productivity road in the short-term. But as our latest QMR survey (published this week) will once again show, the overwhelming majority of NHS finance directors are sceptical about the chances of the NHS delivering the required productivity gains over the next five years. Once again the challenge for the NHS will be to squeeze more health care out of every pound. This is twice the average over the last Spending Review period, but still the lowest of any parties’ time in office and less than half the long-run average. It will be for Scotland, Wales and Northern Ireland to decide spending on their health services, but assuming they increase their health budgets in line with England’s then the increase in real spending to 2020/21 could average almost 1.75 per cent per year. (The oft quoted increase of £10 billion includes the real increase in this year’s budget). For the NHS in England (around 83 per cent of the UK NHS in spending terms) the government has made it clear that spending will rise by £8 billion by 2020/21 – although it remains unclear how this increase will be phased. While next month’s Spending Review will reveal the actual size of the real cuts most of Whitehall has been modelling, we already know more or less what the NHS will get. This is the smallest increase in spending for any political party’s period in office since the second world war and amounts to around a quarter of the long-run average increase in funding since 1951. Over the past parliament the annual average real increase in UK NHS spending was 0.84 per cent (Figure 1). It also makes it easier to make comparisons with other countries’ spending. Looking at the NHS across the whole of the United Kingdom allows analysis of spending as a share of national wealth as measured by GDP. And, as in 2010, NHS spending will be protected.īut the protection is relative and the decade since the 2010 Spending Review will be the toughest financially since the inception of the NHS. Once again, large (25–40 per cent) real cuts are expected for most departments. The overall aim – as in 2010 – will be to eliminate the public spending deficit and reduce government debt as a proportion of GDP. The indications are that the plans will be a rerun of the 2010 Spending Review. Next month the government will set out its plans for public service spending through to 2020.
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