Where does the 2021 Budget leave the NHS and social care?

For health and social care, the recent Budget was more notable for what it did not say than what it did. With a plan for the long-term recovery of services seemingly absent, Nigel Edwards looks at what it all means. This blog was originally published in the BMJ on 10 March.

Blog post

Published: 15/03/2021

This year’s Budget took place in the shadow of the greatest health crisis this country has faced for a hundred years, and was focused on setting the financial framework for a UK recovery from Covid-19 that NHS staff will make possible. Yet after following events like this for many years, I can hardly remember a Chancellor standing up with so little to say about health or social care.

The headlines, and the opposition, focused on the striking headline number that funding for the Department of Health and Social Care is to fall by £30 billion from next April compared to 2020/21. 

In one way that is unfair. The apparent drop is because Covid-19 specific health funding is set to fall from an astonishing £58 billion this year – much of it spent outside the NHS for initiatives like Test and Trace – to £22 billion next year. The latter figure is likely to rise as the Treasury puts more money in from reserves, and core funding for health will actually rise by £7 billion.

But the dramatic falling away of Covid funding illustrates the underlying problem here: the lack of long-term planning and provision to tackle the huge issues that the NHS, social care and people’s health will face as the pandemic recedes.

Hard road ahead

Even before Covid-19 the NHS faced serious staffing problems, and a demand for care greater than it could meet meant that nearly all major waiting times targets were being missed.

While urgent measures have increased the number of staff during the crisis, when the dust settles we are likely to have an exhausted and in some areas traumatised workforce. Pushing them as hard as we did before without worsening the already serious problems with retention and early retirement would be almost impossible.

It is difficult to think of a worse moment to begin an acrimonious war over pay – yet a small increase is almost all that is possible with a core funding increase set at almost the same as was planned before the crisis. The freezing of tax relief on pensions will also add to the anxiety about a loss of senior staff.  

The drying up of international migration for the best part of a year due to Brexit, and its intentional blocking off for social care on January 1st, will likely worsen the situation in raw numbers.  

The Budget does repeat the £3 billion in NHS “recovery package” funding announced in last year’s Spending Review. But this is one-off spending for what is likely a long-term and much larger problem. In addition to the problems of long Covid and the health impact of a struggling economy, it is not clear how the NHS can catch up on the activity missed during the pandemic, which is fast storing up work for the future.

For example, just between April and November there was a 59% drop in planned orthopaedic inpatient admissions, and there was a significant fall in most other specialties as well as in CT, MRI, and other diagnostic investigations (and this in the context of the diagnostics waiting target already not having been met for seven years). None of the proposals allow for the additional costs and productivity loss associated with Covid-19 becoming endemic, nor do they recognise the lesson that running the NHS at such high levels of intensity carries very high risks.  

Conspicuous by its absence once more

If the Budget had too little to say about the future for health care, it was entirely silent on social care. The sector was already in a desperate state, simply not offering any help to tens of thousands in a high state of need. Every aspect of it needs an urgent overhaul. The funding level is too low for councils to meet their legal obligations; the means and need-testing system is unfair and arbitrary; providers are dropping over the cliff edge of financial survival without anybody clearly responsible for overseeing them; and the workforce is underpaid, uncared for and too small.

Yet as we approach two years since the Prime Minister promised to implement an already worked-up plan for reform, the term is not mentioned once in the long Budget document, other than as part of the DHSC’s title. Nor did it feature in any substantial way in the recent white paper.

Some of the rhetoric seems to imply that we are turning a corner. But with renewed austerity, a long haul for the NHS, unresolved issues in social care and pressures on staff, there is still an awful long way to go. 

This blog was originally published by the BMJ on 10 March and is reproduced with permission.

Suggested citation

Edwards N (2021) “Where does the 2021 Budget leave the NHS and social care?”, Nuffield Trust comment.