Many health workers and health campaigners will have heaved a sigh of relief at the outcome of Gordon Brown’s Budget: but they would be well advised to study the small print before revelling in the streets, warns HARRY SLOAN
One factor which nobody, however radical, can question is that Brown has triggered the biggest and most rapid ever increase in spending on the NHS.
Spending next year will rise by a hefty £6.6 billion – a cash increase of over 10 percent, and more than half as much again than the expected uplift.
This will be followed by successive rises of 10 percent each year to 2007 – equivalent to 7.4% if allowance is made for the general rate of inflation, reaching an allocation of almost £106 billion by 2007-8 – equivalent to double the level Labour inherited in 1997.
By any standards these are large sums of money, and indeed Gordon Brown’s plans would meet Tony Blair’s promise to lift British health spending up to and above average levels for other EU countries – from the present level of 7.7% (including private sector spending) to 9.4% in 2008.
This is a bigger increase than most campaigners had even asked for.
Health Secretary Alan Milburn unveiled plans to invest some of this additional cash in recruiting an extra 80,000 professional staff – 15,000 consultants and GPs, 35,000 nurses and 30,000 therapists and scientists.
It all sounds good so far: so where’s the catch?
One big problem is that none of the extra cash kicks in until the next financial year (2003/4): this leaves many hospitals and Primary Care Trusts staring down the barrel of deficits carried over from last year, and facing renewed demands to balance their books by next April.
For many Trusts this already means painful and demoralising cuts and economies are under way even as the government promises "jam tomorrow".
This links to a second major snag with Labour’s handling of the NHS: this year’s spending and all new money will be strictly tied to a series of stringent targets – for which many health authorities are already warning there is barely enough money to go round. In South East London, for example, where the new Strategic Health Authority faces pressure to achieve 22 specific nationally defined targets, it has declared that there will be no resources available to meet any additional local priorities.
So if your name is not on the list, there will be no extra cash at all: and among the key services signally omitted from government performance targets are mental health and in particular the treatment of acute mental illness.
There is no relief in sight for city centre mental health wards struggling to cope and contain potential violence and mayhem with beds 100% or more occupied. And none of the long-awaited investment in 24-hour crisis teams and community-based services to replace long-stay hospital treatment for patients with long-term mental illness seems likely to materialise.
A third, related problem is that the lion’s share of the new money being pumped in to health care is being allocated directly to the NHS, but relatively small amounts to social services, many of which are also facing deficits and cuts.
Yet without a major expansion of social service provision, government targets for the more efficient discharge of older patients from front-line hospital beds will be dead in the water: social services need extra cash to finance the expansion of home help and other support for frail older people living alone, and to purchase additional nursing home places – where these are available.
Indeed the problems of finding sufficient nursing home capacity are likely to worsen in the next period.
Even before Brown’s budget announcement, nursing home owners, almost all of them operating for profit but confronted with rigid ceilings on the amount local councils will pay for each place, have been pulling out of the market, and converting many of their properties into more lucrative luxury flats.
It seems certain that the new injection of cash into the health care system will be seen by these profit-hungry proprietors as a green light to rack up their charges, especially now Alan Milburn has decided to impose fines on local authorities which fail to deliver sufficient facilities for patients discharged from local hospital beds.
However Milburn has handed over only a pittance in extra cash to the councils, leaving them caught between a rock and a hard place. Local crises can be expected.
The fourth general problem is the extent to which the new, expanded NHS budget will be siphoned off into the pockets of the private sector. There has been no major increase in the allocation of NHS capital, which is needed to replace the costly option of financing new hospitals and facilities through the Private Finance Initiative.
This means that by 2007 as much as £4.5 billion a year will be flowing straight out of local NHS revenue budgets to pay for the lease of PFI hospitals and fees for support services from private contractors.
But Milburn has also restated his view that short-term shortages of beds and capacity to treat waiting list patients should be tackled by buying in more operations from the private sector through the so-called "Concordat".
After the Budget, Milburn declared that the number of NHS patients receiving private operations will double again this year to over 150,000.
Yet NHS hospital Trusts in London, where this is a major problem, warn that this will cost an average 40% extra for each patient treated privately – slicing even more vital cash, and poaching scarce nursing and medical staff from hospitals already struggling to cope with demand.
This brings us to the fifth problem – one that cannot be evaded much longer: the availability of staff.
The plans to recruit thousands of additional nursing and professional staff each year underline the importance of retaining staff already trained and in post.
Yet the evidence is that all over the country nursing staff are being lured out of the NHS, either to other jobs, or drawn to the higher rates of pay, flexible hours and reduced level of responsibility offered by nursing agencies.
Theatre staff earning £22,500 in the NHS can find themselves working next to agency staff doing the same job for £35,000 plus travel expenses: agency nursing staff can earn rates of up to £30 an hour, with even more over weekends or bank holidays.
The fact that NHS managers are having to pay these rates to agency staff reflects the dire shortages of qualified staff within the NHS itself. The only way to prevent this haemorrhage of skills (and cash) to the private sector, the NHS itself must increase pay, and improve conditions.
Top NHS managers know they cannot hope to meet demand or government targets unless they manage to recruit and retain the additional qualified staff they require.
This calls for a wholesale reorganisation of the chaotic system of NHS pay. But government ministers recently backed out of the complex "Agenda for Change" negotiations over restructuring NHS pay, apparently because they were alarmed at the extra costs of a fairer system.
Now ministers are trying to placate Tories and other right wing critics, who argue that Gordon Brown’s billions would be "wasted" on pay increases – by taking a tough line, and offering little or no concessions on wages.
In fact in a labour intensive, qualitative service, which already spends 70-80 percent of its revenue on pay, there is no other way to expand other than by spending more on staff. And if staff are not paid more, then many will vote with their feet, leaving key services in headline-grabbing crisis.
But there is a sixth, crucial area in which Brown’s plans could founder, and where a tough line from government is required.
Costs of pharmaceuticals have been soaring, pushing Primary Care Trusts and front-line services into financial problems: Brown’s budget is likely to trigger even more price rises, which could carve a deep hole in the NHS kitty.
As a monopoly purchaser, the NHS should take a tough line against the profiteering drug firms: but this would have been assisted had Brown decided to raise some of the additional funding for the NHS from a turnover tax on the drug firms and other multinationals that have sussed out Britain and New Labour as a soft touch.