Lean years to follow lean years in NHS

The NHS has been warned that it faces another lean period when it gets to the end of the present period of austerity.

According to a report in the Financial Times (paywall), Richard Douglas, the Department of Health’s director general of policy, strategy and finance, told a group of NHS managers that they were “deceiving themselves” if they thought the financial pressure on the health service would be relaxed after 2014-15.

The health service is currently a year into the four year ‘Nicholson challenge’ to make £20 billion in efficiency savings to bridge the gap between flat funding and rising costs and demand, without increasing waits or cutting quality.

But Douglas reportedly told a meeting of senior NHS finance managers that the health service might need to find a further £20 billion or more of savings in the years following the present spending review period. Further details may emerge in the autumn statement.

Public sector spending was not the focus of today’s Budget. Instead, Chancellor George Osborne focused on stability, growth, and changes to personal tax rates, with an increase in the personal allowance and a 5p cut in the top rate of tax from 50p to 45p next year.

However, he confirmed that public sector workers would see their pay frozen again this year, and that he would explore local pay – which union Unison claimed would remove £1.7m from the economy.

Osborne also indicated that there would be further changes to welfare spending, which he warned was threatening to increase to one third of all public spending, and to pensions and social care.

Liberal Democrat minister Paul Burstow is working on a social care white paper, which has been delayed by the government’s problems in passing its Health and Social Care Bill. Osborne indicated it would be published shortly.

The Chancellor also announced some measures to deliver super-fast broadband and wi-fi networks to ten cities, including London, Birmingham and Manchester, and £15m for initiatives in smaller cities.

Delivering new public services, including telehealth, has often been cited by government reports as a reason to invest in digital infrastructure. However, Osborne linked the move to support for Britain’s creative industries.