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Inflation is eating into the NHS budget, putting waiting times and treatment targets at risk, a leading think tank has said.
On Monday night, the Health Foundation warned that the health service was facing a “perilous” situation after “little additional money” was included in the Autumn Budget.
Writing for The House, the think tank’s senior economist, Eric Yang, said that while the £1.1bn increase to the Department of Health and Social Care (DHSC) day-to-day budget since the Spring Statement is welcome, the department needs an additional £1.6bn “to cover inflationary pressures alone”.
“This means the settlement is potentially some £0.5bn short and leaves no cushion in what NHS leaders expect to be a very difficult year,” he wrote.
The think tank also said a 1.8 per cent cut to the DHSC capital spend budget means it’ll be harder for the NHS to improve its productivity.
PoliticsHome understands the NHS capital budget, which covers hospital equipment and infrastructure, is being cut to help fund greater defence spending.
The Chief Secretary to the Treasury, Emma Reynolds, recently told PoliticsHome’s podcast The Rundown that the Labour government will have to make “difficult” decisions at next year’s Spending Review to fund its priority areas while sticking to its fiscal rules.
“With little additional money in the Budget, the test now is whether trusts can balance their books without cutting the capacity, staff and investment needed to improve care. On current evidence, the road ahead looks perilous,” Yang wrote.
Responding to the think tank’s warning, the DHSC pointed to a recent written answer by minister Karin Smith, who said: “The Department’s contribution to the Defence Investment Plan will avoid any impact on the delivery of frontline NHS services, patient safety, investment in technology, or the New Hospital Programme.”
She added that large capital projects are “designed to be flexible” so that funding can be redeployed “without affecting their overall delivery”.
The think tank’s intervention comes as the health service prepares for another challenging winter period.
On Monday, the government announced that GPs would receive an additional £40m to provide extra care to people with frailty and long-term conditions in the coming weeks. Funded by cash reallocated elsewhere in the NHS budget, it is hoped that extra GP checks and tests will help reduce the number of hospital admissions this winter.
According to the Health Foundation, NHS urgent and emergency care is “under severe strain even before winter”, with figures showing that, in September, more than 50,000 patients waited over 12 hours in A&E after a decision to admit them.