Posted on Tuesday, 3rd March 2009 by admin
Hardly a day goes by without more bad news about the economy. But what about the UK’s biggest employer – the NHS?
The prime minister’s “information revolution” for public services has been announced with much fanfare.
Gordon Brown says he wants to create an Amazon-style online system to allow the public to rate services, including NHS care.
But this is not the real story in the health service in England. Behind the scenes managers are frantically working up plans to cope with the recession.
As thousands of jobs go on the high street and factories of the UK, the NHS realises it is only a matter of time before it too feels the squeeze.
The health service was given what has now turned out to be a generous settlement last year before the full-force of the downturn was felt.
The budget rose by 5.5% this year and will do so again next year. This comes after five years of record rises.
But that will all change in 2010. Experts are suggesting the budget may rise by just 1% which could equate to a freeze or even fall in funding once inflation is taken into account.
‘Grim’
Alan Maynard, professor of health economics at York University, believes it is going to be “grim” and will require a “sea change” in approach.
“After seven years of plenty the NHS faces seven years of want as the gross distortions in the economy are corrected.
“As a consequence the NHS is under intense pressure to recognise the problem and increase productivity by squeezing more out of available resources.”
Regional health bosses met Health Secretary Alan Johnson at the beginning of this year to discuss the way forward.
During the meeting, savings of 10% to 15% were talked about.
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 Things will change, but services won’t suffer if we do it right  Nigel Edwards, of the NHS Confederation
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Nigel Edwards, director of policy at the NHS Confederation, which represents health trusts, says: “The NHS is looking to create a financial buffer.
“History tells us that the toughest times are when the economy is recovering and the borrowing has to be paid back.
“We are well aware the next settlement is going to be hard and are already working towards that.”
But what does this mean for services?
Mr Edwards is confident that handled correctly the health service will be able to make the savings through becoming more productive and efficient.
He says: “This does not mean services won’t close, they may, but new ones will re-open. Things will change, but services won’t suffer if we do it right.”
He says this could mean more services moving out of hospitals and into community settings – this process has already started and includes the likes of diabetes clinics, minor surgery and diagnostics.
But the fear still remains that some services could suffer. During the problems with deficits several years ago so-called “soft targets” such as public health, health visitors and training were hit.
Concern
Dr Chris Spencer Jones, Birmingham’s public health director and a former chairman of the British Medical Association’s public health committee, says: “The concern is that politicians and managers look at what is discretionary in the NHS.
“They conclude we have to fund hospitals, A&Es and ambulances, but not softer things like mental health, community services and public health.
“That puts the health and well-being agenda at risk and that just stores up more problems for the future.”
There are also serious question marks over new hospital builds. One of the legacies of the 1970s recession was that the district general hospital building programme stalled.
There are still an estimated £2.5bn of projects in the pipeline, funded through private finance under the government’s PFI programme.
The King’s Fund health think-tank has already predicted a slow down in these kind of schemes.
But chief economist Professor John Appleby has also suggested private health care could be hit.
Spending on private healthcare has already begun to shrink and Richard Branson’s Virgin group has rowed back on plans to set up a network of health clinics.
Professor Appleby says: “The credit crunch will reduce the ability of the private sector to borrow to fund developments.”
The message is clear – the full-force of the recession may not have hit health services yet, but it is only a matter of time before it does.
Tags: credit crunch, NHS, recession
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