Spending squeeze for NHS despite Darling's promise

Budget cuts and pay freezes after unprecedented growth in investment, Government warns

Hospitals and GP practices are facing a squeeze on spending not seen for more than a decade, the Government revealed yesterday.

A pay freeze for doctors, real cuts in hospital and GP budgets and a "slash and burn" approach to management are foreshadowed in one of the gloomiest documents on the NHS published by a Labour government.

To ease the pain, patients are to be given a greater voice in determining where funds go in the NHS, with up to 10 per cent of a hospital's income dependent on its meeting acceptable levels of patient satisfaction.

After a decade of unprecedented growth that has seen NHS staff numbers soar and waiting times plunge, yesterday's announcement – though long anticipated – represents an astonishing reverse. And this in a service supposedly protected from cuts.

Despite Chancellor Alastair Darling's pledge to shelter hospitals and schools from the economic hurricane, there are stormy times ahead. Yesterday the Department of Health published its "vision" for the NHS over the next five years, optimistically titled "from good to great", which lays bare the gravity of the challenge.

The "protection" promised to the NHS by the Treasury is relative, of the kind afforded to a low-rent mafioso from a Godfather. Mr Darling announced on Tuesday that next year's (2010-11) pre-planned NHS increase would go ahead and 95 per cent of the budget that pays for front line services would be uprated for inflation to 2013. That amounted to £3.7bn extra for the NHS over the next three years – enough to prompt initial sighs of relief from medical organisations. But the increase is dwarfed by recent record rises, and will not be enough to keep pace with the demands of an ageing population, advances in treatment and higher patient expectations. David Nicholson, the NHS chief executive, has said efficiency savings of £15-20bn will be required in the three years from 2011, in addition to the £3.7bn increase.

If the NHS is facing hard times, however, other Government departments are preparing for cuts on a frightening scale. The Institute for Fiscal Studies yesterday estimated that, with the exception of hospitals and schools, the public sector should expect cuts of 13 per cent – 6.4 per cent a year – over the two years from 2011-13.

Yesterday's NHS document shows that even achieving the lower level of saving required in the health service will cause unavoidable pain. The report signals a four-year freeze on the hospital "tariff" – the prices charged by hospitals to Primary Care Trust's for treating their patients. As staff, equipment and other costs rise, hospitals face a real terms cut.

Following the Chancellor's announcement of a 1 per cent cap on pay rises for all NHS staff from 2011, ministers have turned the screw a notch tighter on the highest paid by recommending a zero pay rise for consultants, GPs and senior NHS managers for 2010-11 to the NHS Pay Review Body. They have also said that GPs should be required to cut the cost of running their practices by at least 1 per cent.

Management costs in PCTs and Strategic Health Authorities are to be slashed by 30 per cent over four years, the report says. For lower-paid staff the offer of an employment guarantee in return for flexibility, mobility and "sustained pay restraint" will be explored.

Speaking at the launch of the report before an audience of NHS chief executives in London yesterday, Andy Burnham, the health secretary, said that there would be no going back to the longer waiting times that affected the NHS when money was tight in the past.

"That will not happen this time," he said. "Once we were all about building capacity in the NHS. Now we must focus on getting more from this expanded system."

Mr Burnham said he wanted a more "preventative and people-centred" NHS. Making hospitals depend for up to 10 per cent of their income on meeting acceptable levels of patient satisfaction was part of a "symbolic shift", he said. "I want to encourage the NHS to look at the service though the eyes of patients and their families." Patients would also be offered more choice to register with GPs anywhere; one-to-one care for complex conditions such as cancer; and the right to die at home.

Mr Burnham attacked the Tories for pledging to reverse the rise in National Insurance contributions announced by the Chancellor. "It is quite ridiculous for them to oppose that rise and then say they will ring-fence NHS funding without saying where the money will come from. They should not be allowed to get away with it."

Andrew Lansley, the Tory shadow Health Secretary, said: "Andy Burnham's announcement falls badly short in providing the vision, reform and new ideas that the NHS needs. Conservatives have promised to free up the NHS from Labour's waste and bureaucracy, put power in the hands of patients and protect NHS spending, with real terms increases every year."

Dr Hamish Meldrum, chairman of the British Medical Association, said: "Repeated talk of 'pay restraint' when what is really meant is no pay rise at all, is demoralising. While healthcare workers clearly understand the financial pressures on the NHS, and will want to act responsibly, they should not be punished for a situation which is not of their making."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
Life and Style
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
  • Get to the point
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Senior Accounts Assistant - Accounts Payable - St. Albans

£26000 - £28000 per annum + benefits : Ashdown Group: Senior Accounts Assistan...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Recruitment Genius: Installation and Service / Security Engineer

£22000 - £40000 per annum: Recruitment Genius: This company is part of a Group...

Recruitment Genius: Service Charge Accounts Assistant

£16000 - £18000 per annum: Recruitment Genius: Are you a a young, dynamic pers...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions