article banner
News release

Autumn Budget 2021: public sector healthcare response

list item with text on the right

Matt Custance, Head of Public Sector Healthcare, Grant Thornton UK LLP, commented:

“It needs to be acknowledged that Government has continued to fund the NHS with real term increases in spending at a time when other departments and local government have suffered. Funding has been announced to help NHS organisations claw back elective waiting lists, which have ballooned during the pandemic, and additional funding for ongoing vaccinations and Covid treatment. However, demand for healthcare has been increasing, even before the pandemic, while the workforce has become increasingly scarce so whether this will be enough – only time will tell.

“The capital budget appears now to be stuck at a level of around £9-11 billion a year – which is significantly more than the depths of the post-PFI period. This is likely to be enough to fund normal renewal of services and some backlog, but not enough to fund the New Hospitals Programme which we believe will cost significantly more than £20 billion over the next 10-15 years. It’s still unclear where this funding will come from.

“The NHS is facing cost pressures, most notably in the cost of the workforce but also in materials and supplies. To weather the storm, NHS providers need to invest in digital and infrastructure so that they can attract staff and use them better. £2.1 billion has been announced to fund digital innovation and this is a welcome boost – but we know from the Wannacry attacks that NHS IT systems are well behind other sectors and that few NHS organisations have the kind of digital systems they need to face the challenges of the coming decade. This is likely, again, to require new sources of funding not yet announced.

“It’s telling that healthcare and the NHS are not mentioned in the “Investing for Growth” section of the Budget document, which focuses on so-called economic infrastructure. The pandemic has demonstrated the central role that the health of a population plays in determining economic outcomes. Yet, successive governments continue to treat health as just a spending department. As the largest employer in most towns and cities across the UK, as a magnet for life sciences industries and as an enabler of a productive and healthy workforce, the NHS needs to be recognised as a key driver of economic growth and a key part of the Government’s levelling up agenda.”

Uncover our insight, analysis, and expertise on the Autumn Budget 2021