Nuffield Trust response to the Chancellor’s Spring Statement

Responding to the Chancellor’s Spring Statement, Nuffield Trust Chief Executive Nigel Edwards said:

“Amid a cost of living crisis, it is not surprising that the Treasury will be scrutinising the increased spending on the NHS raised by higher taxes and looking for cost efficiencies.

“Changes to national insurance threshold announced today will provide some welcome support to low earners, and will not reduce the amount of money already committed to health and care*. But by choosing to put tax cuts above spending the Chancellor has made it less likely that health and care will see any further increases in funding during this parliament.  

"This underlines that despite a boost from the levy, the NHS will still face tight budget constraints. Funding increases to the NHS’s core budget become less generous in each of the next three years, which is why the Chancellor has doubled the annual efficiency target to 2.2%. In reality, however, NHS trusts will need to find even more room for efficiency than that, as at the same time there will be steep reduction in Covid support despite the fact this cost pressure is likely to remain in place for some time yet.

“Just meeting this target is going to be an exceptional stretch. For over a decade the health services has been trying to uncover more and more savings while carrying out more procedures but this has never happened to the speed at which the government hoped. We also do not yet know the level at which Covid-19 management in hospitals will hamper efforts to speed up elective recovery and for how long.

“Making savings within staffing costs will be near impossible given the shortages across health and care, and the impact of inflation on costs and pay. 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.

“Banging the well-beaten drum for more savings will not help meet yet another target. To reach these levels we’ll need to see real change in the way service works such as investment in more remote and digital technology, changing how clinicians work, and rolling-back or adapting work around Covid-19 measures.”