Health funding increase will not be spent on service improvements, King's Fund warns
Nearly half of the £4.5bn increase in health spending promised for the next financial year will be absorbed in staff pay rises, according to a King's
Fund analysis published this week.
General price rises — including capital expenditure — increased
costs associated with recommendations from the National Institute of
Health and Clinical Excellence (NICE) and claims for negligence are expected
to account for another third of the extra money pledged by the Government
for the NHS during 2006–07, it said.
Another £1.26bn will be needed to help meet hospital waiting time
targets and other Government deadlines, which leaves just 2.5 per cent
of the extra billions promised for new development, researchers concluded.
But the King’s Fund said the Department of Health was confident
that trusts could save £1.2bn from the current financial year,
which could go towards helping to meet next year’s spending plans
as well as ensuring that services were run more cheaply.
The report “Where’s the money going?” comes at a time
when a quarter of NHS trusts in England have forecast a total deficit
of £948m by the end of this financial year. In the analysis, the
King’s Fund admits that although year-end deficits are not new
the amount of money trusts expect to be in the red at the end of this
financial year is the highest since Labour came to power in 1997.
The report said: “As in previous years, next year a significant
proportion of the extra cash will go on higher pay. This is not in itself
a bad thing — helping to attract and retain staff, for example.
However, with consultant and nurse pay rates already near the top of
the international league table, it raises questions about value for money.”
The King’s Fund also warns that the squeeze on hospital budgets
will be tighter next year as the DoH has increased the tariff price for
hospital work by just 1.5 per cent, which is less than the level of inflation. |
The
Pharmaceutical Journal
Acrobat
Reader