Small handouts are no substitute for proper long-term visionby Ruth Thorlby / August 6, 2019 / Leave a comment
Talk about ungrateful. For months, a chorus of voices in the NHS policy world have been calling for urgent funding for NHS buildings, equipment and IT. Capital funding was not included in last year’s five-year funding settlement, which only covered day-to-day running costs for the NHS in England. The funding settlement was followed by the NHS Long Term Plan, which set out bold ideas to improve a broad range of services. But many of them, such as boosting cancer survival rates by catching the disease earlier, hinged on substantial capital investment in, for example, diagnostic equipment like CT and MRI scanners.
At the weekend, the prime minister announced some much-needed capital investment: £1.8bn—£1bn of which for this year—and a list of 20 NHS organisations in England which will get new wards, operating theatres, diagnostic kit, mental health inpatient units and even entire new hospitals. And the response of the NHS policy world? A good start, but not enough, not going on the right things, and a lot of debate about whether it is even new money.
Are the complaints justified? First, let’s take the “new money or not” point. From the perspective of hospital managers, it matters a lot. The NHS has been able to keep afloat financially since 2010/11 by choking its capital budget, drawing on funding for assets to pay for operational expenses. As a result, capital spending declined in real terms by 7 per cent between 2010/11 and 2017/18, but to make matters worse, some of this was due to capital money being siphoned off into revenue budgets to pay for staff and medicines, to the tune of £4bn between 2014/15 and 2017/18.
Hospitals coped by not investing in new equipment and putting off maintenance. This year, an end to the capital drought was promised for thrifty hospitals: substantial bids for new capital projects were put forward in return for their spending restraint. Last month, some of these plans were knocked back by ministers, concerned about overspending. So, although the expectation is that the overall capital budget will be increased from £6bn to £7bn for this year, meaning it technically is “new money,” some will see this as giving back money that was already “saved” by NHS hospitals. At any rate, it will need to be spent fast, as we are now well into the financial year.
The second complaint, that this is not enough money, is…