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Spring budget: Rising costs will have ‘domino effect’ on the NHS

Spring budget: Rising costs will have ‘domino effect’ on the NHS

By Jess Hacker
24 March 2022

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The cost-of-living crisis will have a ‘domino effect’ on the pressures facing the NHS, health leaders have said, amid criticism of the Treasury’s spring budget plan.

Presenting his statement to the Commons yesterday, Chancellor Rishi Sunak confirmed that the 1.25% National Insurance (NI) hike – expected to raise £36bn for health and social care – would go ahead from 1 April as planned but did not pledge any additional funding for the NHS.

Sunak defended his decision to ignore calls to delay the NI hike given the rise in living costs by saying it was necessary as ‘a dedicated funding source for the country’s top priority, the NHS and social care, providing funding over the long term as demand grows’.

He also said the income threshold at which people need to start paying the NI tax will be increased by £3,000 to £12,570 form July.

This comes days after the Treasury doubled the NHS’s annual efficiency target to 2.2%, as part of a series of major cost cuts.

However, Matthew Taylor, chief executive of the NHS Confederation, warned that the cost-of-living crisis coupled with ‘soaring’ inflation will push ‘thousands’ of households into poverty: a key driver of poor health.

He said: ‘This will then have a domino effect on pressures facing the NHS as its teams work hard to clear the waiting list and respond to rising demand for healthcare services.’

Mr Taylor cautioned that the Chancellor must be aware of ‘the increased strain and pressure’ the crisis will have on the NHS, particularly the impact it may have on lower paid NHS staff.

Similarly, Saffron Cordery, the deputy chief executive of NHS Providers, noted that increasing fuel prices have already had a ‘real impact on key NHS staff’, including community health teams who drive to visit their patients.

She added that the scale of savings NHS services are expected to make are made more challenging by the growing backlog for care, widespread staffing shortages and workforce burnout.

‘The impact of inflationary pressures including energy and fuel costs will make their savings requirement even more stretching,’ she said.

And Nigel Edwards, chief executive of the Nuffield Trust, said that meeting the doubled efficiency target will require changing how clinicians work and rolling-back or adapting work around Covid-19 measures.

It will be ‘near impossible’ for the NHS to make savings within staffing costs, given the chronic shortages, he said.

He added: ‘The squeeze in living costs will undoubtedly heap more pressure on exhausted staff once again grappling with rising numbers of patients in hospital with Covid.’

This all comes a week before the Government brings an end universal free Covid tests.

Despite the approaching deadline, specific detail promised for NHS leaders on whether staff will be expected to pay for their own tests is yet to appear.

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