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
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Frank Turner performing at 93 Feet East
musicReview: 93 Feet East, London
News
Toronto tops the charts across a range of indexes
news

World cities ranked in terms of safety, food security and 'liveability'

Extras
indybest
Voices
A mother and her child
voices
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
2015 General Election
May2015

Poll of Polls

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

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

iJobs Job Widget
iJobs General

Recruitment Genius: Recruitment Assistant

£19000 - £21000 per annum: Recruitment Genius: Are you a friendly, confident i...

Tradewind Recruitment: Primary Teaching Assistant

Negotiable: Tradewind Recruitment: At Tradewind Recruitment we are currently l...

Tradewind Recruitment: Physics Teacher

Negotiable: Tradewind Recruitment: Tradewind Recruitment is currently working ...

Recruitment Genius: Case Manager - Occupational Therapist / Physiotherapist

£28000 - £34000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee