The outcome of the general election along with the Summer Budget offer some clear pointers about the new government’s approach to the NHS and local government over the next five years.
The most obvious concerns money, with the Budget confirming the Conservative’s manifesto pledge to find an extra £8bn for the NHS by 2020, if not when this money will start arriving.
NHS insiders will verify that this is barely enough to keep the lights on and the service is running out of money now. There is an even bigger ‘productivity’ gap of £22bn, which few think achievable – though there is certainly scope for the NHS to achieve better outcomes with existing resources as our recent work on ‘Better Value’ has shown.
Turning to local government, the Budget was entirely silent on social care. The reduced gradient of public spending cuts planning over this parliament offers some comfort but the protection extended to the defence budget only piles the pressure on unprotected departments, especially local government.
The decision to extend the national minimum wage will add at least £1bn to the pay bill for social care alone and further stretch the financial sustainability of these services. All eyes now turn to the autumn spending review though the likelihood is that any extra money for social care will come from only one place – the NHS – unless there is an imaginative equivalent to getting the BBC to pay for TV licences for the over-75s?
The other headline policy is the increasing convergence of the government’s devolution policy – driven primarily by economic considerations – with health and social care integration. The escalating financial pressures on both the NHS and local government make this a risky combination.
The committee stage of the Cities & Local Government Devolution Bill has left us no clearer about how devo deals will magic away 67 years of massive constitutional difference between the NHS and local government. Whilst integration and devolution are the right way forward, the holy grail might well turn out to be a poisoned chalice. Whatever their prospects, the future of local government and the NHS look more inextricably intertwined than ever.
Richard Humphries, assistant director, policy, The King’s Fund