News release

Budget 2020 and the NHS

Malcolm Lowe-Lauri, Head of Health, Grant Thornton UK LLP, commented:

“The Chancellor’s 2020 Budget represents a bittersweet success for the NHS. Government came through on a number of existing promises including additional funding of £6bn, as well as a recommitment to Phases 1 and 2 of the Hospital Infrastructure Programme which commits to the renewal of 40 NHS hospitals - a multi-billion-pound programme. The Chancellor has also given a commitment of £5bn to help public services cope with the impact of COVID-19, including additional NHS money. He repeatedly made the point that the NHS would get whatever funding it needs to respond to the crisis. This is the bittersweet part – every public service dreams of a blank cheque – but in this case, it’s to respond to a crisis that could cripple the service. The NHS barely copes with flu season as it is. With the Chancellor preparing for a scenario where 20% of workers may be sick at any one time, the health service is staring down the barrel of a crisis where demand hits unprecedented levels and its own staffing could be severely constrained. When people are the main currency of the NHS, it’s a situation that even money is unlikely to be able to fix. 

“The NHS now has a challenge to use this money wisely, not only to cope with the crisis, but to make itself fit for a technology enabled future. Now is an extraordinary opportunity to get patients and clinicians used to using technology like video calling for consultations, moving the service away from its reliance on bricks and mortar. This is an opportunity to increase the NHS’s use of more efficient and centralised remote diagnosis, testing, monitoring and treatment. Take up by the NHS of technological solutions has always been hindered by the combination of a lack of investment and an unwillingness to change traditional operating models. This is an opportunity the NHS needs to take to break down both these barriers, because it must.

“There are of course questions around what this funding really covers. Does it just cover the cost of the crisis or will it also help the NHS to make up for displaced activity? If the virus takes off, we will see swathes of elective treatment cancelled and waiting lists spiral further. If we are to recover from that, we will need investment in NHS services well beyond the duration of the crisis, in order to work through this backlog.

“In other NHS related developments, the controversial taper mechanisms for the pensions annual allowance now kick in only at £200,000 pa. This will reduce the difficulties NHS Trusts are facing with getting staff to work beyond their contracted hours. Ironically, the COVID-19 crisis is almost certain to mean that Trusts will be asking healthy clinicians to work more additional hours than ever before – and so the increase in the threshold may not be enough, in the very year that it will be most needed. But it is a significant step forward. 

“It’s also positive that the government has recognised that, post Brexit, R&D will need a substantial boost, up to £22bn per annum and to a long-term target of 2.4% of GDP. This is critical for the NHS as it seeks to attract top researchers and clinicians. It’s also critical to efforts around the country to promote innovation by bringing the health service closer to academics and industry.

“This is a budget in the backdrop of a public health crisis that is threatening to become a national emergency. This is the first time in recent years that the healthcare’s role in delivering economic growth and productivity has been displayed so starkly. We therefore think that it’s absolutely right that the government is finally turning its attention to healthcare infrastructure, as well as economic infrastructure, so we welcome the Chancellor’s re-commitment to the renewal of 40 new hospitals under the Health Infrastructure Programme. The first time that government produced a National Infrastructure Plan was a decade ago – but it specifically ignored health infrastructure. So, it will be welcome to everyone who values the NHS that it is not being ignored now. Let’s hope this is the start of a long-term rhythm for investment and maintenance of the NHS estate.”

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