CIPFA's view on the Autumn Statement and health

30-11-2016

By Jane Payling, Head of Health and Integration, CIPFA

On 23 November, Philip Hammond delivered his first Autumn Statement since taking over as chancellor. After creating a moment of intrigue by announcing this was also to be his last Autumn Statement, he went on to explain planned changes to the timetable that will see the future Budgets being issued in the autumn accompanied by a Spring Statement earlier in the year.

Following this brief moment of frivolity, there was little more to make anyone smile, especially those involved in health and social care, which received no mention of note and certainly no additional funding.

The statement included a substantial re-forecasting of government finances since the Budget 2016, with the public purse forecast to be £122bn worse off in the period until 2021, with debt rising from 84.2% of GDP last year to 87.3% this year, and further increasing to 90.2% in 2017/18. As a result the government is no longer seeking to deliver a budget surplus by the end of this current Parliament, leaving that to be achieved "as early as possible" in the next Parliament.

This relaxation has allowed current spending plans to be maintained while additional borrowing will be used to fund infrastructure investment, including a welcome £2bn in research and development. Sticking to the current spending plans means continuation of austerity for public services, although it seems likely that the same broad priorities will stay in place for the remainder of this Parliament, including ringfencing, on the NHS, defence, overseas aid and the triple-lock for pensions. CIPFA issued a Briefing on the Autumn Statement (PDF, 301 KB), which included the following comments on health and social care:

  • Social care services are already suffering from the reduction in funds to local government over the past decade, yet the statement provides no additional support or even retiming of support for social care. 
  • The increase in the National Living Wage, while it was expected, actually makes the position tougher as it will increase social care delivery costs. The Local Government Association puts this at more than £330m. It would be sensible for the effects of that annual increase to be match funded. CIPFA has called for bringing forward the full introduction of the planned £1.5bn increase in the Better Care Fund and expanding councils’ ability to raise council tax for social care purposes. We would suggest this should top the list of actions required in the local government settlement. 
  • It is disappointing to hear the chancellor claiming to be supporting the NHS and backing the NHS’s Five Year Forward View by delivering on the promise to increase health budgets by £10bn. This includes the £2bn in funding issued in 2014/15. Leading commentators and Parliament’s own Health Select Committee have concluded differently. The Select Committee stated that the plan "does not in our view meet the commitment to fund the Five Year Forward View" because, taking 2015/16 as the base year, total health budgets will increase by only £4.5bn in real terms by 2021.
Rob Whiteman’s article All is Well with Social Care – and That's a Post-Truth Fact went on to examine further what might be going on in the minds of the politicians. He points out that for social care the position is near critical and that the failure to address the urgent needs of health and social care may in time define this government as much as Brexit. He does, however, hold out a glimmer of hope that announcements concerning social care may be held in reserve until the local authority settlement later this month.