The claim
“I can confirm not just that we will increase spending as planned next year, in hospitals, schools and policing.
“But we can also pledge that spending on these crucial front-line services will continue to rise, over and above inflation, after 2010-11, so that we can meet the improved public service guarantees and entitlements we have set out.”
Alistair Darling, pre-budget report speech, December 2009
Cathy Newman checks it out:
It sounded incredible didn’t it? At a time of economic strife, Alistair Darling was still able to leap to his feet in the Commons and promise above-inflation spending on cherished frontline services.
He gave the impression that the party of the NHS was to continue the bountiful spending settlements that have seen the health service budget triple since 1997.
But is that vow to increase hospital spending in the next financial year (from this April) the whole unvarnished truth?
Over to the team for the analysis:
Total net spending across the NHS in England is set to rise by 1.6 per cent in real-terms (above inflation) next year, to £105.8bn. Not bad in today’s climate, but much less than the 7.5 per cent real-terms growth it saw this year, or the 7.8 per cent in 2007-8.
But spending falls into two categories: capital, or investment spending – i.e. new hospitals, wards, intensive care upgrades, new computers and big bits of kit like x-ray machines; and resource, or current spending – i.e. everyday running costs like doctors’ and nurses’ wages, drugs, bandages, central heating and cleaning.
And while Alistair Darling painted a rosy picture for the total budget, that disguised the grim reality of savage capital spending cuts.
Buried away in a Department of Health submission to the health select committee, a table (page 18) spells out just how far capital expenditure will fall next year.
In the current financial year the NHS gets £6.7bn of capital spending – just over £1bn of it coming from the private finance initiative (PFI).
But in the 2010-11 financial year – just two months from now – the number is set to be just £5.3bn. The amount coming from PFI nearly halves, and public funding falls by nearly £900mn.
In real terms, this is a 21.9 per cent spending cut.
That means new hospital wings, building refurbs, and expensive but crucial bits of equipment up and down the country will be under threat. Not something the government wants you to know about in election year.
Incidentally, the Treasury warned in happier times against slashing capital spending too enthusiastically. A document on lessons learned from the Conservative slash and burn era says: “capital programmes were cut as a way of meeting short term current pressures, with long term detrimental effects”.
Department of Health officials admitted to us today that capital spend does indeed decline, but said there are good reasons for this. The department points out that in the 2008 pre-budget report, the Treasury brought forward £100m from 2010-11 to prop up the economy this year.
Cathy Newman’s verdict:
Alistair Darling told the truth, but with lashings of spin. While he bigged up a minuscule overall spending increase, he didn’t breathe a word about a far bigger percentage drop in the capital budget.
Mind you, the Conservatives won’t be reversing that 21.9 per cent cut. Tough times are ahead for the NHS, whoever wins the election. And that’s an inconvenient truth the politicians would rather forget on the campaign trail.
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