Brown's budget- Health service slips down the waiting list
If the National Health Service was listening to the Budget speech yesterday it should have been quaking in its boots. The chancellor machine-gunned the House of Commons, not just with his usual battery of statistics but with his priorities - ones he clearly sees as shaping his inheritance when, as he hopes, he steps into the prime minister's shoes.
There were loads of them: education, science, transport, research, poor children, lone parents, overseas aid, security: you name it, he mentioned it.
With one striking exception. The National Health Service - the so-called jewel in Labour's crown that this year will take almost one-fifth of government expenditure - merited not a single mention in an hour-long speech.
The NHS is clearly in the doghouse with Gordon Brown. He has given the service its longest period of sustained growth in its near 60-year history and it has rewarded him by heading for a record overspend, managing to create a famine of delayed operations and disappearing jobs amid this enormous feast.
It recalls a vignette back in 2000 when the chancellor announced his first big tranche of extra spending for the service. A day later Tony Blair rose to announce Labour would produce its great national plan for the NHS. Beside the prime minister Mr Brown sat glowering. The body language seemed to say: "I've given you the money, it's down to you if you mess it up."
Well, at least temporarily, the NHS has done just that. Now the suspicion is that the chancellor has reversed the approach to the spending round that many people - certainly health ministers - hoped he would adopt.
Instead of deciding what the NHS needs after 2008 when the record spending increases end, and then adjusting other spending programmes to accommodate it, Mr Brown seems to be working the other way around: establishing his priorities and then leaving the health service to scrap with everyone else over what is left.
It will not be a lot. NHS expenditure is now so large that even if overall government spending rose by 3 per cent after 2008 - 50 per cent more than the purely illustrative figure Mr Brown has pencilled in - the service would need to take 40 per cent of all the available extra money to secure even a 4 per cent increase. That is the absolute minimum Sir Derek Wanless, in his government-commissioned report on future health spending, calculated was needed if the service were to keep up with demand. Were overall spending to rise by 2 per cent, a 4 per cent increase for the NHS would take 60 per cent of all the available extra money.
The NHS's prospects now look appreciably slimmer than that. Because, as Mr Brown underlined yesterday while sprinkling extra cash on education, training, science and research, these - potentially wealth-creating - categories of public spending appear for now to be his top priorities. In addition, the government is committed by its manifesto to a significant increase in overseas aid: another subject dear to his heart.
The government has missed by a long way its target of reducing child poverty by 1m by 2005. It will have to spend even more if it is to hit the goal of halving child poverty by 2010. And Mr Brown's belief in that aim was reflected in the more generous child benefits he announced yesterday and in the extra help to get more lone parents back to work. Added to that, he is set to have to find extra cash up to 2010 to keep the pension credit growing in line with earnings, regardless of any more strategic decision on what happens to pensions after 2010.
All of which means that for everyone else - and now, it seems, for the NHS - life will be much tougher after 2008 as Labour's big spending party ends. That was signalled by the 5 per cent a year real-terms cut each year after 2008 in the budgets for the work and pensions department, revenue and customs, and for the Treasury itself: cuts far larger than those demanded by the Gershon review of Whitehall efficiency.
The Home Office has had to agree to a real-terms freeze. Other departments can expect similar pain, in their administrative budgets if not in their actual spending programmes.
What this implies is a radical reshaping of the way services are delivered, notably in the revenue department and in work and pensions. That will have to go well beyond worthy efforts to share back-office functions. In the case of work and pensions, it probably means heading for a single agency handling all benefits; and perhaps an eventual merging of some of its work with that of the revenue.
The one advantage for those departments is that, following yesterday's announcement, they now know their budgets for an unprecedented five years - giving them the chance to change how they do business. Public sector employees were already reacting with alarm to that yesterday. For the private sector, however, it probably means only one thing: more outsourcing.
http://news.ft.com/cms/s/20e04174-ba12-11da-9d02-0000779e2340.html
There were loads of them: education, science, transport, research, poor children, lone parents, overseas aid, security: you name it, he mentioned it.
With one striking exception. The National Health Service - the so-called jewel in Labour's crown that this year will take almost one-fifth of government expenditure - merited not a single mention in an hour-long speech.
The NHS is clearly in the doghouse with Gordon Brown. He has given the service its longest period of sustained growth in its near 60-year history and it has rewarded him by heading for a record overspend, managing to create a famine of delayed operations and disappearing jobs amid this enormous feast.
It recalls a vignette back in 2000 when the chancellor announced his first big tranche of extra spending for the service. A day later Tony Blair rose to announce Labour would produce its great national plan for the NHS. Beside the prime minister Mr Brown sat glowering. The body language seemed to say: "I've given you the money, it's down to you if you mess it up."
Well, at least temporarily, the NHS has done just that. Now the suspicion is that the chancellor has reversed the approach to the spending round that many people - certainly health ministers - hoped he would adopt.
Instead of deciding what the NHS needs after 2008 when the record spending increases end, and then adjusting other spending programmes to accommodate it, Mr Brown seems to be working the other way around: establishing his priorities and then leaving the health service to scrap with everyone else over what is left.
It will not be a lot. NHS expenditure is now so large that even if overall government spending rose by 3 per cent after 2008 - 50 per cent more than the purely illustrative figure Mr Brown has pencilled in - the service would need to take 40 per cent of all the available extra money to secure even a 4 per cent increase. That is the absolute minimum Sir Derek Wanless, in his government-commissioned report on future health spending, calculated was needed if the service were to keep up with demand. Were overall spending to rise by 2 per cent, a 4 per cent increase for the NHS would take 60 per cent of all the available extra money.
The NHS's prospects now look appreciably slimmer than that. Because, as Mr Brown underlined yesterday while sprinkling extra cash on education, training, science and research, these - potentially wealth-creating - categories of public spending appear for now to be his top priorities. In addition, the government is committed by its manifesto to a significant increase in overseas aid: another subject dear to his heart.
The government has missed by a long way its target of reducing child poverty by 1m by 2005. It will have to spend even more if it is to hit the goal of halving child poverty by 2010. And Mr Brown's belief in that aim was reflected in the more generous child benefits he announced yesterday and in the extra help to get more lone parents back to work. Added to that, he is set to have to find extra cash up to 2010 to keep the pension credit growing in line with earnings, regardless of any more strategic decision on what happens to pensions after 2010.
All of which means that for everyone else - and now, it seems, for the NHS - life will be much tougher after 2008 as Labour's big spending party ends. That was signalled by the 5 per cent a year real-terms cut each year after 2008 in the budgets for the work and pensions department, revenue and customs, and for the Treasury itself: cuts far larger than those demanded by the Gershon review of Whitehall efficiency.
The Home Office has had to agree to a real-terms freeze. Other departments can expect similar pain, in their administrative budgets if not in their actual spending programmes.
What this implies is a radical reshaping of the way services are delivered, notably in the revenue department and in work and pensions. That will have to go well beyond worthy efforts to share back-office functions. In the case of work and pensions, it probably means heading for a single agency handling all benefits; and perhaps an eventual merging of some of its work with that of the revenue.
The one advantage for those departments is that, following yesterday's announcement, they now know their budgets for an unprecedented five years - giving them the chance to change how they do business. Public sector employees were already reacting with alarm to that yesterday. For the private sector, however, it probably means only one thing: more outsourcing.
http://news.ft.com/cms/s/20e04174-ba12-11da-9d02-0000779e2340.html
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