Budget 2017: what does the Chancellor’s announcement mean for the health of the NHS?

08 March 2017

Today’s Budget showed signs that more is needed beyond efficiency savings, in health and social care. Recent weeks have seen repeated calls for further funding for health and social care.  While the £2 billion injection of cash over the next three years announced today for social care is welcome, it is overdue and not a long term solution. And the reality is that addressing social care alone and the additional commitments for capital expenditure, although welcome, are not going to meet what’s expected to be a £22bn health funding gap by 2021.

It has been a long and gruelling winter for the NHS as staff battled increasing patient demand against a backdrop of rising drug and staff costs and the need to deal with the knock-on effects of a social care sector under pressure.

In addition to the headline £2bn funding announcement, the Chancellor stated today that councils will need to work with NHS colleagues to consider how the additional funding can be best spent to share good practice.  The social care funding announced, ‘will be supplemented with targeted measures to help ensure that those areas facing the greatest challenges make rapid improvement, particularly in reducing delayed transfers of care between NHS and social care services.’

PwC's own research Redrawing the health and social care architecture shows that in the long term, the balance of power needs to be shifted to local areas so they assume greater accountability for financing and control of services - passing down funds to a local level which can be spent in a tailored way by leaders who understand the problems facing populations within their own areas. Today's Budget announcement has a role to play in integrating care and may provide an opportunity for councils and health bodies to share learnings with a view to raising standards system-wide.

This is, of course, one part of a rather complicated jigsaw puzzle.  Questions remain about how financial incentives should be reshaped to better align with the new objectives of integrated, outcome-based care.  The Government has also announced a review this year into finding a long-term solution to social care funding, which is much needed; the care system as a whole needs visibility about long term funding so it can plan, in an integrated way for change, to make it sustainable - and successful.

There are also questions to be addressed on the role of citizens’ in managing their healthcare. Recent polling, commissioned by PwC showed the 50% of the public are prepared to entertain paying more via National Insurance contributions if that’s what it takes to deliver a better health service.  

More broadly, policy attention is needed on how the public can be empowered to actively look after their health to prevent them from becoming unwell, through uses of digital technology, greater ownership of patient data, for example – with the societal benefits this would deliver.

We have seen recognition from the Chancellor today that the system itself needs to be reshaped. Quick fixes and sticking plasters alone will no longer cut it.  The future of the NHS and the nation’s health and social care depends upon it.

Quentin Cole | Partner, UK Health Industries Leader
Email | +44 (0)20 721 26784

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