Emergency budget 2010 - Health, Social Care & Science

The Chancellor’s statement included few announcements of direct relevance to the healthcare sector.  This was not unexpected.  The Government has already made clear it will increase health spending in real terms although it is very unlikely that the figure will be substantial.  It is notable, of course, that the NHS’s sizeable workforce will be directly affected by the public sector pay freeze.  Unsurprisingly the trade unions have already criticised the decision.  TUC General Secretary Brendan Barber highlighted that the small concession for the low paid was still less than inflation, and Dave UNISON’s General Secretary, Dave Prentis, replied that “the battle for Britain’s public services has begun.”  The issue now is how the unions decide to respond in practice - and the extent to which they gain the support of the wider public.

The immediate priority for health service organisations is how they will deliver the £15 to £20 billion of efficiency savings that were first identified by NHS Chief Executive David Nicholson last year.  The new Secretary of State, Andrew Lansley, is equally committed to achieving this target.  He set out further details in the Revisions to the NHS Operating Framework for the NHS in England 2010/11 that was published yesterday, which calls for management costs to be cut by one third by 2014.  SHAs will determine how this is managed across SHAs and PCTs, but it is expected that most of the reductions will be made in 2010/11 and 2011/12.  Job losses will inevitably be part of this. 

There were several other items of general interest in Budget 2010, which was published by the Treasury  after the Chancellor’s speech, including: 

·         The Government confirmed it will deliver £6.2 billion of savings in 2010-11 “to start to tackle the budget deficit and to bear down on waste and inefficiency across the public sector.”

·         The Efficiency and Reform Group (ERG) has been set up within the Cabinet Office.  It will support government departments in renegotiating contracts and will oversee “an immediate freeze on unnecessary spending on consultancy, advertising and new ICT spend over £1 million.”

The next key milestone will be the publication of the health white paper in July, which will be followed by the Health Bill in the autumn.   The results of the Comprehensive Spending Review will be announced on 20 October.  It will set out the Government’s spending plans for the years 2011-12 to 2014-15 and will include health, social care and science.