2015 Spending Review: what the Chancellor should say on health

24 November 2015

Tomorrow, the Chancellor will clarify how the £8 billion of additional spending pledged for the NHS by 2020-21 will be achieved. It’s being reported today that the NHS in England will receive an extra £3.8 billion next year, £1.5 billion the year after, smaller increments in the middle years of the Parliament and a rise of £1.7 billion in 2020-21.

This decision is likely to be the focus of attention, but given the widespread recognition that this additional funding will not make the health service sustainable, the real story of the Parliament will be the NHS’s effort to transform its productivity. The Five Year Forward View suggests radical reform can lift historic productivity performance to 2 per cent a year, possibly rising to 3 per cent.

There are several steps the Chancellor should take to help the NHS move towards these heroic increases.

First, the Government should endorse high-value healthcare (achieving the best possible health outcomes at the lowest possible cost). This would re-orientate the health policy debate away from inputs – nurses, doctors, money – to outcomes for patients. Sending this message through the NHS could help identify the right metrics of performance.

Second, the Government must prioritise prevention. A sustainable health service will be impossible without reducing the incidence of costly, long-term diseases such as diabetes. The private sector can play a role here – the NHS must accelerate the adoption of new technologies which can support wellbeing and facilitate self-care.

Third, the Government should do more to give patients meaningful choice between healthcare providers. Studies have shown the positive effect patient choice can exert on provider efficiency and quality. Barriers to new entrants – in both primary and secondary care – should be challenged. Patients should be empowered to choose through the extension of personal budgets.

Finally, the Government must be bold in reforming the NHS workforce. Half of total NHS spend goes on staff. Pay freezes – the tool of the last Parliament – are unlikely to be sustainable in a global market place. Instead, new ways of working, the creative use of skill mix and staff engagement will be essential. Role descriptions and terms and conditions will have to change.

Preserving the NHS as a high-quality public service requires reform. The Chancellor should be bold.

Leo Ewbank, Researcher, Reform




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