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Healthcare Community Life

Autumn Statement 2015: How is the NHS affected?

Chancellor of the Exchequer George Osborne took the iconic red briefcase into the House of Commons yesterday (25/11/2015) to deliver what has been considered one of the most anticipated budgets in many years. This is mainly due to the removal of ties with the Liberal Democrats, controversy over tax credit cuts, cuts to public spending and the new promises of military action in Syria and how the country’s finances are going to pay for them while cutting the deficit. It is also been said that this budget will be seen through to 2020.

However, how does the NHS and the contract market fair in this quarter’s budget?

NHS to receive an upfront cash injection of £3.8bn and £8.4bn by 2020, Council tax to pay for Social Care.

The National Health Service is to receive cash injection of £3.8bn next year to alleviate the short-term pressure that is placed upon the health service.

The overall £8bn investment by 2020 has been confirmed as a part of the Conservatives (and personally George Osborne's) promise in their manifesto to give an extra £8bn to the NHS by 2020. The current annual budget for the NHS is £101bn and will rise to £119.4bn by 2020, meaning an overall investment of £8.4bn once adjusted to inflation.

While the large investment, there is mention of social care being funded by a 2% rise in council tax. If social care is not financed, front line NHS services will likely to be affected.

£22bn of efficiency savings to be made

While having an additional £8bn to hand, the NHS has to make £22bn in efficiency savings. The chancellor has said that the immediate £3.8bn next year will protect front line services. This means that prevention services (such as stop-smoking services etc.) will likely be cut along with staff training. Front line services will then have to handle this, perhaps making this a false economy.

Grants for student nurses to be replaced with loans

One of the obvious big cut is the cost of tuition being cut from the NHS budget and replaced with loans. No in-depth detail has emerged on how this system will work (whether it will be merged into student loans or through private sector loans). However, this cut to grants will likely deter future student nurses and may create future recruitment crises. Also, the cap on training places for nurses and midwifes is set to be removed.

Contractors

Contractors can breathe a sigh of relief as IR35 (tax by Government for contractors who deem to not meet the self-employed criteria) was not mentioned, despite the recent articles suggesting a change was imminent. This could still change in the future. However, tax relief for travel and subsistence expenses will be restricted if employed through an employment intermediary, such as an umbrella company or personal service company. If employed via a personal service company where the intermediaries’ legislation applies, the changes will take place in 6th April 2016 and further details to emerge on the 9th of December when the draft legislation is presented.

More specific details on the cuts and investments are likely to become more apparent in the coming months and their benefits and disadvantages of this budget.

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