Training Blog

The NHS is facing an uncertain future because of the credit crunch. This is because lower spending as well as more stress related illnesses caused by worries such as unemployment and money related issues means the health service must plan ahead if it is to survive.

John Appleby states: “at best the NHS might expect no real growth in funding from 2011 when the current budget runs out. Although the prime minister pledged not to cut spending on health, with foundation trusts reporting cash balances of £2.5 billion and the rest of the NHS planning a surplus of £1.7 billion, the government may look to claw back end of year NHS surplus funds — taking back unspent money may not be viewed as a cut.” He also says that it is the long term issues that cause him the most concern.

The increase in inflation will have a huge impact when every 1% increase is costing the health service around £380 million. The higher living expenses means even more pressure on NHS staff’s disposable income meaning higher wage claims and calls for contract renegotiation.

It isn’t just long term that the credit crunch is affecting the NHS in the short term, the credit crisis has had an impact on private sector health providers and foundation trusts. Virgin Healthcare has already pulled back from plans to enter the health market and it is likely that future private finance initiative schemes will slow down.

It is said that: “NHS spending is guaranteed up to April 2011, what happens after then looks decidedly less rosy. The health service will almost certainly have to plan for lower growth in funding from 2011 onwards.”

Professor Appleby said the NHS is now better equipped to deal with the economic downturn than in previous years, with almost two thirds of trusts now showing solid financial management. He also adds that the Government’s financial system bailout using £387 billion of taxpayers’ and borrowed money will push national debt to over half the UK’s gross domestic product and this will inevitably affect public services.

Therefore it would seem that the NHS has its work cut out with the cut in the budget allocation imminent and the increased demand on its resources with staff demanding more money in order to maintain the standard of living and also with more people suffering stress related illnesses. It would seem that there is no area of society that hasn’t been affected by the credit crunch which orginated from the banks therefore it’s safe to assume that all areas of society are interconnected.