Spending Cuts and Pay Rises in Health & Social Care
Key Contact: Jon Lawley
Ahead of the Autumn Budget, planned for 30th October, the new chancellor Rachel Reeves announced some initial Government spending plans that will impact the health & social care sector.
A pay rise for NHS workers
- Most NHS workers will receive an above-inflation pay rise of 5.5-6%.
- Junior doctors in England have been offered a two-year pay deal worth an average of 22%.
The Government will hope to reduce the spate of industrial actions that have impacted the delivery of healthcare services in recent years.
Planned squeezes elsewhere
However, the chancellor’s largesse was not unbounded in the wake of a claimed “£21.9 billion forecast overspend” inherited by the last government. She responded by placing the Conservative’s pledge to build 40 additional hospitals by 2030 under review, as well as ditching the planned cap on the amount people pay for social care in England due to come in this autumn.
Waiting for October
We wait to see what the Budget brings for taxation and other healthcare services. Tax rises are expected, however, to allow the government to fund its manifesto pledges, and there could be a flurry of M&A activity as business owners seek to sell their assets before any change to capital gains tax is levied.
Ongoing issues in the sector
#1 Last month, new health secretary Wes Streeting described the CQC as “not fit for purpose”. However, it is expected that the government’s aim will be to reform, rather than replace, the regulator.
#2 Streeting has begun to tackle the reform of NHS dentistry and the NHS contract in England, holding positive talks with the BDA who said that “failed contracts and underfunding have fuelled the current crisis”. As part of its manifesto pledges, Labour promised to provide 700,000 more urgent dental appointments and recruit new dentists to areas that need them most.
#3 Despite finding an agreement in negotiations around GP pay, bringing to an end a dispute that has lasted for a number of years, the government has found itself on the end of further industrial action from GPs, who have voted to work to rule in a dispute over funding levels.
#4 Staff burnout brought about by understaffed facilities remains a concern for the sector, with Labour also pledging to train thousands of GPs and midwives in the run up to the election.
Devolved nations
Among the devolved nations there is the hope (but no guarantee) that an increase in tax revenue will lead to an increase in the central budget set by Westminster.
There has also been change in Wales (where NHS waiting lists remain the highest in the UK), as Eluned Morgan, the new First Minister and former health secretary, has appointed former First Minister Mark Drakeford as her health secretary on an interim basis. While critics say that the NHS in Wales requires a health secretary on a permanent basis, Drakeford brings with him experience, having held the post previously between 2013 and 2016.
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