For the NHS, 2018 really does appear to be make or break time. The NHS is in a financial maelstrom – more than three-quarters of all providers are in deficit. Last year’s spending review provided upfront funding for the NHS in 2016-17, but this is short lived. Many in the NHS must be hoping that the tight financial squeeze expected later in this parliament is not really the government’s plan, and that the Treasury will be reopening the health service spending settlement in a year or two. The political argument would be that health is simply too important to be allowed to fail. Just as the government has in effect provided a bailout for the service in the spending review, so it will do the same in a couple of years’ time. And anyway, isn’t the chancellor being too pessimistic and money can always be found?
Illustration: The Health Foundation
Taking account of the economic outlook Since the autumn, the economic outlook in the UK and globally has worsened, and delivering the economic and fiscal forecasts in the autumn statement looks tough. This is likely to stiffen the Treasury’s resolve that the anticipated overspend is not going to be funded by another raid on its fragile coffers but will come out of the extra cash earmarked for next year. This extra funding is going to have to stretch a long way – filing the existing financial black hole, meeting rising pension costs, funding demand pressures and supporting transformation. To rely on the Treasury riding to the rescue is only for those who like very high stakes poker – not really the way to run a vital public service. Against this backdrop, much of health policy looks perplexing. We cannot afford inefficiency or poor productivity. David Nicholson,former chief executive of NHS England, recognised this back in 2009 but progress has been woeful. All too often the focus has been on the one-off, short term and tactical. There has been little drive to address the fundamental barriers to a more efficient and productive service. The Five Year Forward View – Simon Stevens’ plan to make the NHS more sustainable – and Lord Carter’s review of NHS spending, offer hope for a different approach. But 15 months on from the launch of the Forward View, we still don’t have an efficiency plan for the NHS. Beyond the immediate backyard of NHS services the storm clouds are gathering. Delivering a sustainable health service requires action on social care and public health. Evidence suggests that around £1 in every £5 of NHS spending is the result of ill health attributable to the big five risk factors of smoking, alcohol, poor diet, obesity and inactivity. This, more than anything else, is why we perform so poorly compared with our European neighbours on health outcomes. Despite this, public health budgets are being cut in real terms by almost 4% a year.

The gap between the number needing social care support and the number receiving it

On social care, the government has recognised that the system can’t sustain a further round of cuts on the scale of the last parliament. Most estimates are that the additional funding for social care won’t bridge the funding gap. Social care is the dog that hasn’t barked – despite the reductions in access to social care service, demonstrating that this has had a direct impact on the NHS has been difficult. But recent data from the Health Survey for England shows that the lack of robust research evidence on the impact of social care cuts should not be a source of complacency. Providers are reporting that one of the reasons for their rising deficits is delayed transfers of care, partly related to issues of timely access to social care.
The graph shows the gap between those who needed social care and the numbers who didn’t receive it in each income group. Illustration: The Health Foundation
There are increasing numbers of vulnerable older people living in silent misery with no help. The chart above shows the gap between need and provision (from any source, formal and informal, public and privately funded) for men and women in different income groups. The gap between need and receipt of help is greatest for those on low incomes and growing over time. Whatever the economics of that, it surely cannot be something we aspire to as a society in 2018