- Medicine is OnlyWan, Nuffield Trust and The King's Fund have jointly analysed the current state of health and social care finances.
- Our analysis shows that social care will face a funding gap of £1.9bn by the end of next year.
- While social care is the most immediate priority, the NHS funding settlement also needs reviewing - most obviously for 2018/19 and 2019/20 when the NHS is due to receive almost no increased funding.
At the end of 2015, our three organisations came together to provide an independent assessment of what the Spending Review would mean for the NHS and social care. One year on, before the 2016 Autumn Statement, we have updated this assessment to reflect developments over the past year. We hope this will inform the debate with a clear analysis of the funding position and its implications for health and social care services.
Our analysis shows that health and social care now face uniquely challenging financial and operational pressures. Recent measures to increase social care spending are welcome but will not cover rising demand and the costs of the national living wage. The sector will face a funding gap of £1.9bn by the end of next year, meaning thousands more older and disabled people could be denied access to the care they need. The government needs to provide at least a short-term solution in the upcoming Autumn Statement by bringing forward to next year the additional funding that will be provided through the Better Care Fund. This is planned to reach £1.5bn by 2019/20.
The Department of Health’s budget increase of just over £4bn in real terms between 2015/16 and 2020/21 is insufficient to maintain standards of care, meet rising demand and deliver the transformation called for in the NHS five year forward view. Although progress is being made on finding productivity savings, the pace of change required to deliver £22bn of savings by the end of this parliament is unrealistic – especially as new cost pressures are emerging as inflation increases. In addition, cuts to public health budgets are a false economy, undermining the government’s commitments on prevention.
While social care is the most immediate priority for funding, the government will also need to review the NHS funding settlement, most obviously for 2018/19 and 2019/20 when under current plans the NHS will see no additional investment.
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