Health and care spending: The sting in the tail


The government was happy to shout about the good news this week. With much fanfare, Chancellor George Osborne claimed he was making the "biggest ever" financial commitment to the NHS in England with the £8.4bn real terms rise by 2020-21.

But buried in the documents released with the spending review on Wednesday was the sting in the tail: cuts to some of the services that the health service depends on.

NHS spending accounts for the vast bulk of the current £116bn Department of Health budget - £101bn of it in fact. But it's what's happening to the remaining £15bn that ministers are not shouting about.

Next year that pot will be cut by more than 10% in real terms to £13.6bn. By the end of the Parliament the drop will be 20% in real terms.

The size of the fund doesn't sound a lot when set beside the money for the frontline. But it goes a long way.

About £5bn of it is spent by Health Education England in training the doctors and nurses of the future.

Another £3bn to £4bn goes on public health, split between local authorities and Public Health England. This is the money that pays for everything from stop smoking services to sexual health clinics. In other words, the services that help improve people's health and keep them out of the doctors' consulting room.

Health and care spending in numbers

  • The health budget in England this year is just over £116bn
  • NHS England received £101bn of that for front-line services with the rest going on areas such as training and public health
  • NHS England's budget will increase by £3.8bn above inflation in 2016-17
  • That equates to a rise of 3.7% - three times more than the average rise given to the NHS during the last Parliament
  • In the following years the rises will tail off and by 2020-21, NHS England's budget will stand at £119.6bn
  • That equates to a rise of £8.4bn once inflation is taken into account
  • The rest of the Department of Health's budget will fall by 20% in real terms from £15bn to just over £13bn in 2020-21
  • Local government spending, in cash terms, to be same in 2020 as 2015

This funding also pays for organisations such as the Care Quality Commission - charged with inspecting services - as well as providing the reserves for the capital budget used to build new hospitals and maintain the existing ones.

Cutting this money will have its casualties. Even those working in the NHS are concerned. Royal College of Surgeons' President Clare Marx says it has the potential to "significantly undermine" the health service.

Meanwhile, nurse bursaries to cover training fees are being scrapped. The government actually believes this will help ensure more nurses are recruited as half of prospective students are currently turned away from nursing courses because numbers have to be capped.

But could it have the opposite effect? Will people think twice before embarking on nurse degrees when faced with thousands of pounds of fees?

And all this is before we come to social care. This is run by councils and helps pay for the costs of care home places and home help for nearly 900,000 elderly people.

The numbers getting help have fallen by a quarter in the past seven years as social care spending has been squeezed. That looks like it will continue - despite the government offering some concessions.

Local authorities are being allowed to raise council tax by 2% to pay for care, while by 2019-20 an extra £1.5bn will be put into the Better Care Fund, a joint NHS and council pot to encourage joint working, which is currently worth just over £5bn.

But overall council funding from government is being frozen in cash terms - a significant reduction in real terms.

It will now be up to councils to set their own social care budgets and while they traditionally prioritise those over other spending commitments, there is widespread concern.

Independent Age, the older people's charity, says the chancellor is "short of money and ideas". Or, as a number of people have put it to me, it simply represents "robbing Peter to pay Paul".

Spending Review 2015 - 25 November

Presented by Chancellor George Osborne, the Spending Review sets out what government spending will be over the next four years, while the Autumn Statement is an annual update of government plans for the economy.

Explained: Which government departments will be affected?

Analysis: From BBC political editor Laura Kuenssberg

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

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