Scottish Government seeks guarantees
- NHS will receive an average 3.4 per cent a year real-terms increase in funding over the next 5 years
- increased funding will support a new 10-year long-term plan the NHS will bring forward
- the long-term plan will help the NHS tackle waste and improve services.
The NHS will receive increased funding of £20.5bn in real terms per year by the end of the 5 years compared to today – an average 3.4% per year overall – in a move to secure the future of the health service as it approaches its 70th birthday, the Prime Minister announced yesterday. However the Scottish Government Finance Secretary has questioned the so-called ‘Brexit dividend’.
The increase will mean the NHS can regain core performance and lay the foundations for service improvements. The funding will be front-loaded with increases of 3.6% in the first 2 years, which means £4.1 billion extra next year.
This long-term funding commitment means the NHS has the financial security to develop a 10-year plan. The plan will be developed by the NHS, working closely with government and be published later this year. The priorities include:
- getting back on the path to delivering agreed performance standards – locking in and further building on the recent progress made in the safety and quality of care
- transforming cancer care so that patient outcomes move towards the very best in Europe
- better access to mental health services, to help achieve the government’s commitment to parity of esteem between mental and physical health
- better integration of health and social care, so that care does not suffer when patients are moved between systems
- focusing on the prevention of ill-health, so people live longer, healthier lives
It will be essential that every pound in the NHS budget is spent wisely. The government will set the NHS 5 financial tests to show how the NHS will do its part to put the service onto a more sustainable footing:
- improving productivity and efficiency
- eliminating provider deficits
- reducing unwarranted variation in the system so people get the consistently high standards of care wherever they live
- getting much better at managing demand effectively
- making better use of capital investment
Health and Social Care Secretary, Jeremy Hunt said: This historic long-term funding boost recognises the superhuman efforts made by staff over the last few years to maintain services in the face of rapidly growing demand. But it also presents a big opportunity for the NHS to write an entirely new chapter in its history.
“The British public love their health service fiercely, and undoubtedly want it to be the top priority for their hard-earned tax contributions.
“The debate over Brexit can be divisive, but that famous campaign promise can now unite us all: the British public voted for £350m a week for the NHS, and that – and more – is exactly what this government will deliver.
In addition to a 5-year revenue settlement, the government will also:
- come forward with proposals to reform social care later this year
- ensure that adult social care doesn’t impose additional pressure on the NHS
- consider any proposals from the NHS for legislative changes that will help it to improve patient care and productivity
- consider proposals from the NHS for a multi-year capital plan to support transformation and a multi-year funding plan for clinical training places
- ensure that public health helps people live longer, healthier lives
The government is able to invest in the NHS because it has taken difficult but necessary decisions to get the nation’s finances back in order and because it is confident it will secure a good Brexit deal that supports our economy.
The Prime Minister explained that some of the extra funding will come from the money the government will no longer spend on the annual membership subscription to the European Union after Britain has left and as well as that taxpayers will also need to contribute a bit more in a fair and balanced way.
The government will listen to views about how to do this and the Chancellor will set out further details in due course.
Scotland ‘needs guarantee that £2 billion promised for NHS will be delivered’
Following Theresa May’s announcement of an extra £20 billion for the NHS, Finance Secretary Derek Mackay has asked the UK Government to provide guarantees on claims that Scotland is set to receive the £2 billion that has been promised, as well as clarification on when that funding will be received, and why the Scottish Government was not consulted during the decision-making process.
The letter reads:
Dear Liz.
While I welcome the Prime Minister’s announcement of additional funding for the NHS, I am concerned that there was no discussion with the Scottish Government prior to the announcement, particularly as it has been reported that part of this additional funding may be delivered through income tax.
Any change to income tax at the UK level will have a financial impact on the Scottish budget through the Fiscal Framework and it is imperative for financial planning purposes that you provide details of any planned income tax changes as a matter of urgency.
The Barnett consequentials associated with this announcement have been reported in the press as being around £2 billion, yet I have received no detail on the scale of the funding nor how it will be funded, including scale and timing.
It is essential that I receive an immediate update on the detail of this announcement and the impact on the Scottish budget. We have witnessed in the past that positive consequentials from increased UK Government spending in one area are often reduced by cuts made elsewhere. I seek your assurance that will not happen in this case and Scotland will receive a full net £2 billion in consequentials.
With the Prime Minister stating that funding will come partly from a so-called “Brexit dividend”, I along with many others am concerned that this is not a credible funding package. Statements by the Institute for Fiscal Studies and others dispute the likelihood of any such “dividend”, owing to the negative impact of EU exit on the UK’s economy and public finances and the UK Government’s commitments regarding the financial settlement between the UK and EU under the proposed terms of the Withdrawal Agreement.
This concept of a “dividend” also does not take into account the need to replace EU funding, either from 2019 in the event of “no deal” or post-2020 if a transition period is agreed. Given that the people of Scotland voted overwhelmingly to remain within the EU, the UK Government must ensure that our public finances are in no way detrimented as a result of the UK’s exit. This includes replacing all lost EU funding, such as CAP and structural funding, in full. This has been a consistent requirement of the Scottish Government, in view of the importance and significant benefits of EU funding to Scotland, and I seek urgent assurances that you will ensure it is fulfilled.
Derek Mackay
See below for details of the settlement:
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