Cowper’s Cut: A Budget for putting politics above prosperity

In a field as crowded as an accident and emergency after 11 o’clock on a Friday night, Brexit Secretary David Davis made an audacious late bid for Political Brass Neck Of 2017 by telling German business leaders in a speech last week that “putting politics above prosperity is never a smart choice” in the negotiations over Brexit.

Living as we do in a time where politics satirises itself non-stop, perhaps irony is on the Liverpool Care Pathway.

The Budget is finished on the Friday of the week before it is given to allow time for The Office for Budget Responsiblity to prepare its detailed economic forecast. So although we won’t formally know what’s in it until Wednesday, 22^nd November, it’s clear from the leaks in the weekend’s media that there is to be no “NHS financial rescue remedy”.

The Telegraph has been fed a story about a possible rise in nurses’ pay next year (subject to a report from a committee). Isn’t it brilliant having public sector pay policy determined by wholly independent organisations like the Treasury?

It is clear that the fundamental issue will not be addressed, which is that the NHS has a not-particularly-well-hidden recurring underfunding problem relative to demand

(It has been wryly amusing to read speculation about pay differentials and moving away from national contracts to reward efficiency. Clearly, memories are too short and too stupid to note that the 2003 Health and Social Care Act allowed foundation trusts to do this: only Southend On Sea did, and after a few years decided that the game wasn’t worth the candle, returning to Agenda For Change contracts.)

Apparently, the trailed capital funding may also emerge.

But it is clear that the fundamental issue will not be addressed, which is that the NHS has a not-particularly-well-hidden recurring underfunding problem relative to demand.

This tells a significant part of the financial story, as does this.

The £4 billion pound man

The best brains in the field suggest that the NHS needs a minimum of an extra £4 billion a year to return things to stability.

When the Care Quality Commission, the Health Select Committee, the National Audit Office, the Institute for Fiscal Studies all say that the money is not working, it becomes tempting to wonder what it would take for Phil and The Munchkins to get serious

Let us be quite clear – this is not £4 billion a year to fund pay rises; nor is this to meet any new asks. This is £4 billion a year to remain upright, and for finances and performance not to deteriorate further.

Simon Stevens endorsed this analysis in his speech to the NHS Providers conference. The choice is stark, in Stevens’ view: lose the progress on waiting times and miss opportunities to improve cancer care and mental health care, or find the money.

The fact that one of four NHS organisations is routinely paying suppliers late or very late should have given Spreadsheet Phil And The Treasury Munchkins (the world’s least successful boyband ever) pause for thought.

But it hasn’t.

The fact that the latest figures from NHS Improvement show a deterioration in the year-end deficit should have done the same.

But it hasn’t.

When NHS Improvement – the NHS’s financial regulator – says that “NHS trusts and foundation trusts are collectively predicting a full-year deficit of around £623 million – £127 million worse than planned. This does not include additional pressures and potential spending needed to meet them over the coming winter months”, the response of the Chancellor and the Treasury munchkins is to give the political equivalent of a Gallic shrug.

So when the Care Quality Commission, the Health Select Committee, the National Audit Office, the Institute for Fiscal Studies all say that the money is not working, it becomes tempting to wonder what it would take for Phil and The Munchkins to get serious.

None so deaf

What would it take to make these people listen?

I can think of three scenarios: none of which are yet in place.

The first would be the serious harm or death of a beloved national figure due to bad NHS care. Readers with long memories will remember the impact of Professor Robert Winston’s mother’s bad experience in the Hammersmith which fed into the run of media events driving the 2000 funding uplift. Imagine if a Strictly star, or well-loved DJ or sportsman or woman. That would focus minds.

The second thing that would focus the government’s minds would be for the Labour opposition to be 15-20 percent ahead in opinion polls. This is not happening.

Or at least, not yet.

The third would be for all of the chief executives in the NHS to coordinate a post-dated resignation letter on the grounds of unwillingness to be responsible for commissioning or providing unsafe care due to government policy. The NHS chief executive accounting officer role is important in both statutory and governance terms: if there were no accounting officers, things would become crunchy for the government very quickly.

There is a fourth, actually, which is that somehow, someone with a hit of wisdom got in and explained to Spreadsheet Phil And The Treasury Munchkins that the cost of repairing a gross failure in the public sector is far greater than the cost of preventing it in the first place. They could look at the total opportunity and financial cost of Mid Staffs, South London Healthcare Trust … there are more than a few parallels.

How did we end up here?

The politics of this are not mysterious. As I noted two weeks ago, the Institute for Fiscal Studies has shown that UK public finances are genuinely looking awful due to persistently low productivity.

The consequences of this choice are likely to be messy, expensive and long lasting.

The politics between Simon Stevens and the government are intriguing. On this week’s “Andrew Marr Show”, the Chancellor simultaneously trotted out the nonsense £10 billion extra NHS funding assertion that has been multiply debunked.

Yet he also said, “I’m very impressed by the way Simon Stevens fights his corner and I’m glad he does; he’s a very skilled and accomplished public servant and I’m sure he’ll go on delivering for the NHS”.

This is some distance from the very public fights that PM Mrs May’s team have sought with the Sun King of Skipton House.

Indeed, the NHS Commissioning Board’s media Twitter account pumped out three examples of Simon Stevens clearly reading into the Parliamentary record that he did not get what he asked for financially.

So is it Simon Stevens’ fault that the money was not enough?

Um, no. Not if we want to be reasonable.

The ask for £8 billion in funding and £22 billion in efficiency gains was, as the magisterial Nick Timmins’ updated classic The Five Giants makes clear, the start of a conversation. Writing about this a while back, I observed and remain sure that as long as David Cameron and George Osborne were in charge, there was a “Stevens Ask” in the bank. When they left, the “Stevens Ask” left with them.

Politics is febrile and unstable … but Simon Stevens (who is better at politics than most politicians) has built a fascinating coalition of pressure without ever having had to stand for election.

At one pole of politics, there is the new effort to see a cross-party “convention” on the future and funding of health and social care.

At another, Boris Johnson and Jacob Rees-Mogg claim to have accepted that the £350 million bus pledge must be honoured.

So we’re approaching a moment when a government that has been repeatedly and very publicly warned that the NHS funding situation will threaten quality, access and safety is going to choose to ignore that warning.

The consequences of this choice are likely to be messy, expensive and long lasting. “Putting politics above prosperity” is one thing: putting your head in the sand in this way is quite another, and leaves the Chancellor, the Treasury and the government very likely to get their arses kicked. This feels like a decisive moment, where Spreadsheet Phil has chosen to put politics above posterity. It will not be forgotten lightly, or soon.