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Doctors' leaders warn 'serious' NHS cuts are buried in budget small print

By Ian Quinn

Chancellor Alistair Darling has been accused of burying plans for savage NHS cutbacks in the small print of yesterday's pre-budget announcement.

Making his address to parliament, Mr Darling sought to draw a distinction between Labour and the Conservatives by suggesting NHS funding increases would be ring-fenced, even after 2011, whereas senior managers have been telling GP leaders to expect huge cutbacks.

Mr Darling told the Commons there would be ‘guaranteed minimum real terms increases' in spending on front-line NHS services for two years from 2011.

The promise seemed to fly in the face of recent claims by NHS chief executive David Nicholson, who told NHS medical directors recently the NHS was facing an ‘unprecedented' financial crisis and has called for cuts of £10-15bn a year by 2014.

Yet the wording of the full report which came out yesterday does not go anywhere near as far as the Chancellor's apparent pledge.

Whilst it confirms the Government will ‘stick to planned levels of overall departmental spending in 2010-11' and announces that ‘public sector current expenditure will grow by an average of 0.8 per cent a year in real terms from 2011-12 until 2014-15' the report only promises that in 2011-12 and 2012-13 ‘95 per cent' of NHS front line spending will ‘rise in line with inflation', meaning five per cent of front line spending could be under threat.

The wording also contradicts the promise of ‘real term increases'.

The detail of the Chancellor's full report also includes some clarity of the extent of the cutbacks facing NHS services, including:

• £10bn a year of ‘effenciency savings' to be delivered by 2012-13 including driving down back office and procurement costs and slashing spending on commissioning, which it admits will only go part of the part of the way towards the £10-15bn target.

• £5 billion of savings by 2012-13 by slashing major IT programmes including the NHS IT Programme

Reacting to the report, Michael Sobanja, Chief Executive for the NHS Alliance, said: ‘As the other 5% have not been specified, this could mean a real cut in the NHS budget.

‘That, combined with the fact that demands on the health service will undoubtedly increase, means we are likely to have to deal with a serious funding gap.'

‘The temptation to make short-term hits on budgets and staff must be resisted, if we are to maintain the NHS through these difficult times.' He added.

Professor John Appleby, chief economist at The King's Fund, said: ‘The announcement suggests that overall there will be a cut in the total NHS budget in real terms in 2011/12 and 2012/13. The Chancellor promises that 95 per cent of health service funding will see increase ‘in line with inflation'. While tough, this is better than the situation faced by many other spending departments.

‘However, clarity is needed about what is at risk if the ‘unprotected' 5 per cent is cut - equivalent to around £5 billion for the NHS in England. There may be savings to be made in administration costs but if training or research are cut this could have consequences for future productivity and quality.'

NHS Confederation Chief Executive Steve Barnett said: 'The announcement only serves to confirm the scale of the challenge which lies ahead. '

Alistair Darling

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