The Chancellor's Budget Statement

  • Alex Jones-Casey
  • 13 December 2017
  • Posted in: Health & Social Care, Planning & Development, Management & Leadership

For this government, making it through a major event in the political calendar with minimal damage control has become something of an achievement.

First, there was the snap election in June. A net loss of 22 seats resulted in the government losing its parliamentary majority and forced the Conservatives to strike a confidence and supply deal with the Democratic Unionist Party; leaving egg on the face of Theresa May, who had spent the election campaign deriding Jeremy Corbyn for alleged links to Irish paramilitary factions.

Then came the Brexit negotiations. Whether it was pictures of the Brexit Secretary arriving for negotiations without any papers or the European Parliament voting that sufficient progress had not been made in the discussions just hours before the Prime Minister addressed the Conservative Party conference. David Davis referencing 58 impact assessments on British industries as evidence of the governments thorough preparations for exiting the EU, only to concede to the Brexit Select Committee that no such papers exist; phase one has been mired by impediments and damage control measures.    

Rounding out the comedy of errors (less funny, when one considers the effect these things have on Britain’s global reputation) was the Conservative Party conference. 

By the time November 22nd came around, the occupants of numbers 10 and 11 Downing Street must have been praying for an Autumn Budget Statement that made it through the week without U-turns and concessions like the last two.         

The pressure was on the Chancellor, Phillip Hammond, to present a budget statement that ensured his job was safe from the encircling Brexiters and appeased the loud voices from healthcare, housing, defence and infrastructure calling for increased investment from HM Treasury.

One of the voices that rose above others was that of Simon Stevens, chief executive of the NHS. Just weeks before the Budget, speaking at an NHS Providers conference, Mr Stevens broke from tradition and publicly called for more spending in the NHS; warning that £4bn of extra funding in 2018-19 was necessary to prevent cancer and mental health services from deteriorating, as well as avoiding waiting lists for operations skyrocketing to in excess of five million. Speaking at the event, Mr Stevens said:

We have a care fragmentation problem and a funding problem… Some may say ‘Aren’t we spending at the European average?’ Well, only if you think that bundling austerity-shrunken Greek and Portuguese health spending should help shape the benchmark for Britain. If instead you think that modern Britain should look more like Germany or France or Sweden, then we are under-funding our health services by £20bn - £30bn a year. 

Cabinet ministers were already trumpeting the Autumn budget as a radical divergence from business as usual from ‘fiscal Phil’; preemptively hailing substantial investments in housing and the austerity-killing abolishment of the public sector pay cap.

Ultimately, the Chancellor delivered a headline-grabbing statement. Unfortunately, those headlines were: ‘Hammond Masks Gloomy Outlook with Stamp Duty Cut’, ‘Budget, what budget? Stock Markets Muted Response’ and ‘UK Growth Forecast Cut by Hammond.’

Despite the lacklustre reaction (by contemporary media standards) the Budget provided some glimmers of hope for those at risk from the controversial roll out of Universal Credit and young people looking to take their first step on the housing ladder.

The Chancellor announced the abolishment of stamp duty on properties under £300,000 for first time buyers. Cutting the tax, originally introduced to fund a war with France in 1694, will no doubt be welcomed by those looking to get on the property ladder; though it will not address the supply shortage that is facilitating landlords in the PRS market to drive up rents to extortionate rates. However, Mr Hammond did announce several proposals to tackle some of the issues that have contributed to the UK’s housing woes. Council tax premiums of 100% will be applied to empty properties to combat the rise, particularly in London, of property being purchased by the rich and purposely kept empty as a means of storing money. The chancellor pledged £44bn of capital funding to help build 300,000 homes per year by the mid 2020’s and even threatened property developers purchasing land and subsequently not building on it with the prospect of compulsory purchase.

The Universal Credit roll out has been the subject of heavy scrutiny from both the Labour Party and Conservative MPs. The scheme, conceived by former Secretary of State for Work and Pensions, Iain Duncan Smith, seeks to amalgamate several benefit payments into one monthly sum as to better reflect a working wage and encourage people to find employment. The initiative has been maligned for the time recipients have had to wait for payments; in some instances, leaving vulnerable people without money for up to seven weeks. The Chancellor announced a £1.5 billion package that looks to cut waiting times down to five weeks by February 2018, as well as allowing for interest-free loans accessible in as little as five days, equivalent to a full month’s payment for claimants facing hardship.         

Additionally, the Budget delivered:

  • £15.3 billion of support for housing over the next five years.
  • A raise of the Living Wage from £7.50 to £7.83.
  • The introduction of a new rail card for people aged between 26 – 30.
  • Measures to raise £4.8bn from cracking down of tax avoidance.
  • An additional £3 billion set aside to ensure a smooth transition from exiting the EU.
  • Expansion of the National Productivity Investment Fund to £31 billion; supporting innovation in transport, emerging tech, research and development; as well as underpinning the government’s modern Industrial Strategy.
  • Extra resources for HM Revenue and Customs to facilitate new technological methods of tackling tax avoidance and evasion.
  • A new £1.7 billion ‘transforming cities’ fund to improve transport connectivity and support jobs throughout England’s city regions.   

In what Mr. Hammond labelled an ‘extraordinary measure’, the Chancellor set aside £2.8 billion of resource funding and committed to £3.5 billion of capital investment by 2022-23. The resource funding consisting of £350million of immediate investment in the NHS to support it through what many believe will be the most difficult winter on record; with an additional £1.6billion boost in 2018/19 and a further £1.2billion in 2019/20. The government recognises these figures as a significant step towards meeting the government’s commitment to increasing NHS spending by a minimum of £8 billion by the end of this parliament. Conspicuous by their absence was any mention of social care or lifting of the public service pay cap.

According to NHS leaders, this isn’t enough.

One very public reaction to the Budget came in the form of Bob Kerslake’s resignation from his post as Chairman of King’s College hospital in London; in the form of an open letter published by the Guardian. Mr Kerslake stated:

I have concluded that the government and its regulator, NHS Improvement, are simply not facing up to the enormous challenges that the NHS is currently facing… King’s, like many other hospitals, is fighting against the inexorable pressures of rising demand, increasing costs of drugs and other medical supplies, and the tightest spending figures in recent times. It was this squeeze that led Simon Stevens, the chief executive of the NHS, to argue publicly and rightly for an extra £4bn a year in the recent budget. In the event, the extra resources in the budget fell far short of that. Social care, critical to the health service because of its impact on discharges from hospital and facing an equal if not greater challenge, got nothing.

Anita Charlesworth, Chief Economist at the Health Foundation and keynote speaker at the forthcoming Open Forum Events conference NHS Staff: Skills, Retention and Recruitment stated the Chancellor’s investment in healthcare is welcome, but doesn’t go far enough: “The evidence is clear that wholesale transformation of the way health and social care is delivered is needed to ensure high quality care. The NHS, the social care system, and the thousands who rely on both every day need adequate levels of investment and today’s budget falls short.”

On Thursday, May 17th, 2018 Open Forum Events will be holding the NHS Staff: Skills, Retention and Recruitment event at the Bridgewater Hall in Manchester city centre. This conference will provide an environment to dissect and discuss the impact of the Chancellor’s Budget on the NHS almost 6 months removed from Mr Hammond’s address to parliament.

  • nhs
  • NHS budget
  • further NHS funding
  • politics
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About Alex Jones-Casey

Alex is a Conference Producer at Open Forum Events, joining the company in the summer of 2017.
 
As a Conference Producer, Alex is responsible for generating ideas and constructing plans for future events with the intention of providing actionable discussion and strategy for public-sector workers and stakeholders.
 
A recent graduate of Teesside Univer…