‘Please hold, your spending review is important to us’

There is little merit in highlighting the fragility of NHS financial planning, but by almost all accounts, 2020 has been exceptionally fraught.

From “whatever it needs”, to covid “top-ups”, to the disappearance of commissioning, nothing has been normal about health service spending since coronavirus came along.

Initially, simplified planning was king, and it energised debate about how cash could be moved, organised and incentivised to deliver the best care and services during a pandemic.

Lately though – it seems like the fog has returned. System financial planning, incentive targets, contentious allocations; a lot of uncertainty has returned.

However, one event that promised to deliver some certainty was the prospect of a meaningful spending review that could ease some long-running anxieties on workforce and capital.

It’s been more than a year since the government was meant to produce a multi-year spending review which many hoped would give a firm indication on how it would meet its pledges on workforce and developing the NHS estate.

But now, amid further economic uncertainty and greater restriction on public life, it seems increasingly unlikely there will be any meaningful announcement on long-term NHS spending for the remainder of the financial year.

After reports that the Budget had been cancelled, chancellor Rishi Sunak outlined the government’s latest package of economic support measures this morning.

The chancellor had at least hoped earlier this year that the economy would have stabilised following a first wave of cases, clearing a path for both a Budget and wider spending commitments. Now the focus centres around business and employment stability. There were no announcements on public service or health spending, or mentions of the Budget or a spending review.

There has been suspicion for weeks that this would happen, but the government kept quiet. As of Thursday morning, the deadline for representations to the comprehensive review was still listed on its website as 24 September. Hopefully, some of the work that has gone into those representations, across charities, research bodies and other health organisations will not all have been for nothing.

The NHS, unlike those groups, already has a multi-year funding agreement until 2023-24 under the long-term plan. But crucially, this excludes capital funding, and there are dozens of major estates projects which would have benefitted from some certainty around the capital budget.

So what happens now?

Sally Warren, director of policy at the King’s Fund, said: “I think there will be a single spending review in autumn to hit the local government financial planning timing. I then think next year there will have to be a multi-year spending review, but that could be next summer [or] next autumn.

“Any attempt to do it by March….you still will be probably just coming out of wave two, so the shape of demand for services might be quite uncertain…so I think it will be a next summer or autumn for the multi-year.”

Ben Zaranko, of the Institute for Fiscal Studies, said: “The NHS has got a multi-year settlement already for 2023-24, although those numbers have been blown out of the water now by the initial spending announced this year.

“So I think the thing now is, how much they will be getting this year as part of the catch-up response as they try to get through the backlog of waiting lists, it’ll be whether the extra money this year is purely temporary or if it’s going to persist into future years.”

On this note, there was a rather mysterious speech by Matt Hancock last week, in which he referred to an additional £2.7bn for the NHS, on top of the £3bn announced earlier in the summer. It was mysterious because of a distinct lack of song and dance about this extra money, or any detail on what it will be spent on. The Department of Health and Social Care would only say it was to pay for the response to coronavirus, and local leaders would decide how to spend it.

One green shoot, Mr Zaranko suggested, was that despite record spending during the pandemic, there had been less capital investment across all government departments compared to what had been planned in March. He thinks this may mean they are leaving space for a longer-term NHS estate plan.

Meanwhile, trusts and systems are still unpicking their allocations, which were released just over a week ago by NHS England. Rumblings from financial leads to Following the Money suggest there are significant gaps.

Sally Gainsbury, senior policy analyst at the Nuffield Trust, said that while longer-term commitments are important, systems are still struggling to understand how much money they have to plan the rest of their year.

She added: “It would be useful to know how much money the government is committing to meet the myriad of manifesto commitments that it made, but more urgently people need to know what their funding is going to be in two weeks’ time and they don’t currently have that.

“They’ve been given draft envelopes, which by all accounts are a bit hit and miss about whether that will enable them to meet expectations. How does anyone plan when they’re told the figures are draft anyway?”

There is no crystal ball to determine where resources will be prioritised during the rest of the financial year. And the government’s approach, for now, is crisis-response-mode as it attempts to tackle the failures of NHS Test and Trace, massive job losses, and business closures.

Uncertainty, it seems, is here to stay.