NHS spending: Inflation and demand growth to wipe out almost all of £3.3bn extra funding announced by chancellor

Published

2 years ago

November 18, 2022

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Nearly all of the new NHS funding announced by the chancellor will be eaten up by the costs of inflation and growing demand, with just £800m left over for the improvement of services.

In his autumn statement, Jeremy Hunt promised an additional £3.3bn in funding for the NHS for each of the next two years.

Analysis by the Nuffield Trust, shared exclusively with Sky News, suggests that rising prices and growing demand will use up three quarters of next year’s increase, and the entirety of the increase scheduled for 2024/25.

Half of the total funding boost is likely to be eaten up by inflation, as the UK endures a second year of rising prices. A Sky News analysis found that energy price increases added £121m to the running cost of NHS buildings in the year to March.

Inflation is expected to cost the health service £3.2bn over the next two years, while increased demand from a growing and ageing population is expected to cost the NHS a further £852m next year and £1.7bn the year after.

That leaves just £795m left over for improving services next year, a quarter of the £3.3bn headline funding boost.

The increase scheduled for 2024/25, meanwhile, is set to be entirely taken up in dealing with the pressures of inflation and growing demand.

John Appleby, chief economist at the Nuffield Trust, said that the final amount “could be higher or lower”, depending on whether trusts overspend and whether certain key costs, like nurses’ pay, increase faster than expected.

Nurses are set to go on strike next month over the government’s decision not to raise their pay in line with inflation.

Rising energy costs are already putting NHS England’s finances under strain. Sky News analysis of data from NHS Digital found that an 18% rise in fuel prices added £121m to the running costs of the health service’s buildings in the year to March.

Many NHS trusts expect costs to rise further. A recent report by the British Medical Journal found that some trusts were budgeting for an additional £2m per month in fuel costs next year.

Nottingham University Hospitals NHS Trust confirmed to Sky News that it expects its annual energy bills to more than triple in 2023, adding £24m to its running costs.

It’s not just energy prices that are rising. The increased costs of hiring cleaners, for instance, has added £76m to the health service’s expenses over the past year, while higher costs for providing inpatient meals has added a further £38m.

Matthew Taylor, chief executive of NHS Providers, told Sky News that the new money promised by the chancellor would allow the NHS to “just about keep the show on the road”.

“It will enable us to continue to manage a very difficult situation, and hopefully make further progress in areas like waiting lists.

“What it won’t do is address the fundamental issues and get the NHS to where the public would like it to be.”

More than 7 million people in England are currently waiting for treatment. That’s nearly one in eight of the population, and the number has been rising for 28 consecutive months.

NHS tracker postcode search: See how your local trust is performing through the year

The number of people waiting more than four hours at A&E is also at record levels, while ambulance response times are far above target.

David Maguire, senior analyst at the King’s Fund, told Sky News that local NHS trusts were likely to face “really, really tough decisions” about where to focus their resources in the coming years.

“You always have to prioritise emergency and urgent care. That might mean less focus on goals like improving productivity or investing in preventative care. We’re already seeing a pull back at the NHS England-level on some of the funding for transformation efforts, for example around digital technology and data usage.”

This wouldn’t be the first time the NHS has cut back on long-term investments in order to free up resources for frontline services.

Between 2014 and 2019, £4.3bn earmarked for capital investment was instead used to fund day-to-day spending.

That decision has left the NHS with a backlog of maintenance work worth £10.2bn – equivalent to 92% of the entire annual cost of running the NHS estates.

Nearly a fifth of that backlog (£1.8bn worth) is classified as “high risk”, meaning it could result in “catastrophic failure, major disruption to clinical services or deficiencies in safety liable to cause serious injury or prosecution”.

“We’ve got some hospitals which are currently being held up by struts,” said Mr Taylor.

“That’s not what you want people to be doing – lying in a hospital bed looking at a temporary strut holding up the roof. These hospitals aren’t currently dangerous, but in time they will become dangerous and this needs to be addressed.”

Dealing with the maintenance backlog is increasingly hampering the ability of trusts to invest in improving services. Last year, the NHS spent £1.4bn dealing with the maintenance backlog, 16% of its entire capital budget.

And that capital budget is already low by international standards. In the decade before the pandemic, OECD data shows, the UK’s long-term investments in the healthcare sector amounted to just 0.25% of GDP – compared to 0.38% in France and 0.69% in the US.

Reducing the waiting list

In order to reduce the number of patients waiting for treatment, NHS England set a target in February of returning NHS activity to pre-pandemic levels by early 2022-23, and increasing activity a further 29% within two years.

Thousands of additional staff have been hired in recent years, but the impact of COVID-19 and the demand of the target means that the NHS is still short of staff.

Trusts are increasingly hiring expensive agency workers to fill the gaps, adding further pressure to the budget.

Spending on agency workers reached £3bn in the year to March, up from £2.4bn two years earlier.

Hours before the chancellor’s statement on Thursday, the National Audit Office said the NHS was unlikely to meet its activity targets, pointing to the impact of inflation, staff shortages and productivity issues.

Despite a 13% increase in the number of clinical staff since 2018, the number of people being removed from the NHS waiting list each month has risen by just 2%.

NHS chief executive Amanda Pritchard said the chancellor’s decision to increase funding for the health service showed that “the government has been serious about its commitment to prioritise the NHS”.

“While I am under no illusions that NHS staff face very testing times ahead, particularly over winter, this settlement should provide sufficient funding for the NHS to fulfil its key priorities,” she said.

UK

UK’s first taxpayer-funded injection room to open in radical move to tackle drugs epidemic

Published

5 hours ago

January 10, 2025

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UK's first taxpayer-funded injection room to open in radical move to tackle drugs epidemic

Glasgow has been a city crying out for solutions to a devastating drugs epidemic that is ravaging people hooked on deadly narcotics.

We have spent time with vulnerable addicts in recent months and witnessed first-hand the dirty, dangerous street corners and back alleys where they would inject their £10 heroin hit, not knowing – or, in many cases, not caring – whether that would be the moment they die.

“Dying would be better than this life,” one man told me.

It was a grim insight into the daily reality of life in the capital of Europe’s drug death crisis.

Scotland has a stubborn addiction to substances spanning generations. Politicians of all persuasions have failed to properly get a grip of the emergency.

But there is a new concept in town.

From Monday, a taxpayer-funded unit is allowing addicts to bring their own heroin and cocaine and inject it while NHS medical teams supervise.

It may be a UK-first but it is a regular feature in some other major European cities that have claimed high success rates in saving lives.

Glasgow has looked on with envy at these other models.

One supermarket car park less than a hundred metres from this new facility is a perfect illustration of the problem. An area littered with dirty needles and paraphernalia. A minefield where one wrong step risks contracting a nasty disease.

It is estimated hundreds of users inject heroin in public places in Glasgow every week. HIV has been rife.

The new building, which will be open from 9am until 9pm 365 days a year, includes bays where clean needles are provided as part of a persuasive tactic to lure addicts indoors in a controlled environment.

There is a welcome area where people will check in before being invited into one of eight bays. The room is clinical, covered in mirrors, with a row of small medical bins.

We were shown the aftercare area where users will relax after their hit in the company of housing and social workers.

The idea is controversial and not cheap – £2.3m has been ring-fenced every year.

Authorities in the city first floated a ‘safer drug consumption room’ in 2016. It failed to get off the ground as the UK Home Office under the Conservatives said they would not allow people to break the law to feed habits.

The usual wrangle between Edinburgh and London continued for years with Downing Street suggesting Scotland could, if it wanted, use its discretion to allow these injecting rooms to go ahead.

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The stalemate ended when Scotland’s most senior prosecutor issued a landmark decision that it would not be in the public interest to arrest those using such a facility.

One expert has told me this new concept is unlikely to lead to an overall reduction in deaths across Scotland. Another described it as an expensive vanity project. Supporters clearly disagree.

The question is what does success look like?

The big test will be if there is a spike in crime around the building and how it will work alongside law enforcement given drug dealers know exactly where to find their clients now.

It is not disputed this is a radical approach – and other cities across Britain will be watching closely.

UK

UK weather: Temperatures could fall as low as minus 20C as big freeze continues

Published

7 hours ago

January 10, 2025

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UK weather: Temperatures could fall as low as minus 20C as big freeze continues

Temperatures in northern parts of the UK could fall as low as minus 20C on Friday night as wintry weather continues, the Met Office has said.

There are yellow warnings for ice on Friday morning covering the eastern coast of England and Scotland, the South West, Wales and Northern Ireland.

There is also a yellow warning for snow and ice for northern Scotland. All the warnings expire before midday.

In addition, freezing fog is predicted across central and southeast England, and in parts of Wales, which may be “quite stubborn to clear” on Friday morning, said Met Office meteorologist Liam Eslick.

“It’s going to be another cold couple of days,” he added, and all areas of the UK are likely to experience sub-zero temperatures.

Friday night may bring the coldest temperatures of the current cold snap, with temperatures possibly plummeting as low as minus 15C or even minus 20C.

“That’s probably the lowest limits we’re expecting,” Mr Eslick said.

“We probably don’t really expect many places to get close to minus 20C, but we could see one or two places that could just touch that mark overnight Friday into Saturday.”

That is because of still conditions, high pressure, “not a lot of wind and clear skies”.

In addition, snow on the ground helps to create “sort of a perfect scenario to see those temperatures just plummet”, Mr Eslick added.

Saturday is also likely to be bitterly cold, while Sunday is forecast to be a little warmer.

On Monday, temperatures are expected to be more in line with the seasonal norm, at about seven or eight degrees Celcius.

The freezing conditions have led to travel disruption, with Manchester Airport closing both its runways on Thursday morning because of “significant levels of snow”. They were later reopened.

Transport for Wales closed some railway lines because of damage to tracks.

Hundreds of schools in Scotland and about 90 in Wales were shut on Thursday.

Meanwhile, staff and customers at a pub thought to be Britain’s highest were finally able to leave on Thursday after being snowed in.

The Tan Hill Inn in Richmond, North Yorkshire, is 1,732 feet (528m) above sea level.

Six staff and 23 visitors were stuck, the pub said on Facebook.

UK

Major companies part of drive to get thousands of offenders in work

Published

8 hours ago

January 10, 2025

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Major companies part of drive to get thousands of offenders in work

Bosses of leading high street businesses are set to lead a new drive to cut crime and get ex-offenders into stable jobs.

It’s part of a government initiative creating 11 new regional employment councils across England and Wales.

Leaders from firms including the Co-Op, Iceland, Greggs, and Oliver Bonas will provide voluntary advisory roles in conjunction with probation, job centres, and the Department for Work and Pensions.

The idea is to help ex-prisoners find work while they serve the remainder of their sentence in the community.

The government says roughly 80% of offending is reoffending, while the latest data shows offenders unemployed six weeks after leaving jail have a reoffending rate more than twice that of those in work – 35% versus 17%.

The employment councils will supplement the work of existing employment advisory boards, created by the former Timpsons chief executive, now prisons minister, Lord Timpson.

The advisory boards bring local leaders into 93 individual jails to help provide education and training advice, but largely stop at the prison gates.

The government wants the new councils to act as better bridges for offenders, under one umbrella – bringing together probation, prisons and local employers, helping prison leavers look for work.

This will include connections with work coaches at job centres that will provide mock interviews, CV advice and training opportunities in the community.

Lord Timpson called the new scheme and partnering with business a “win win”.

“Getting former offenders into stable work is a sure way of cutting crime and making our streets safer,” he said.

Last month Sky News heard from former offender, Terry, now employed at the cobblers and key cutters Timpsons, about what he calls an “invisible stigma” for those with criminal records seeking employment.

He said getting a secure job was life-changing because without other options “you’re probably going to think about doing crime”.

Annie Gail, head of social impact at Cook Foods, which is taking part of the government’s new scheme, also told Sky News that prison leaver programmes such as theirs are “challenging”.

She said having ex-offenders in public-facing roles “can cause concern” but insists “good business is about more than just turning a profit” and instead is about being “a force for good in society”.

The new scheme is set to start next week, and plans to get thousands of ex-offenders into stable jobs, away from a life of crime.