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GP practices face continued funding pressure as autumn statement warns of pay ‘restraint’

GP practices face continued pressure on their funding after the Government confirmed that public pay ‘restraint’ would continue well into the next parliament.

Announcing his autumn statement today, chancellor George Osborne said more cuts are in the pipeline, with a further £3bn in departmental savings planned over the next three years.

But the NHS budget will continue to be protected for 2014/15 and 2015/2016, while local government is also spared the axe, to allow council tax freezes over the next two years.

Mr Osborne was bullish about the impact of the Government’s welfare and austerity cuts on the economy, with growth officially predicted to be 1.4% this year - more than double the previous estimate.

But he said further austerity was needed, with more cuts to departmental and welfare spending as well as public sector pay on the horizon, while the state pension age is set to rise again – to 68 for people retiring in the mid-2030s and 69 in the late 2040s.

According the full published statement, the Government intends to ‘continue to reform’ public sector pay and ‘take tough decisions and workforce’ in future.

On NHS spend, the statement said: ‘To lock in lower levels of spending, Autumn Statement 2013 announces a reduction in unprotected Resource Departmental Expenditure Limit (RDEL) budgets of £1.1 billion in 2014-15 and £1 billion in 2015/16.

‘Health, schools and Official Development Assistance (ODA) budgets will continue to be protected in line with the policy set out at Spending Round 2013.

‘Local government is excluded from this reduction, to help local authorities to freeze council tax in 2014-15 and 2015-16.’

And on public sector pay it outlined: ‘The public sector pay bill accounts for around half of departmental resource budgets. This government has introduced public sector pay restraint up until 2015-16, which has played an important role in consolidation. However, the next government will need to continue to reform and take tough decisions on public sector pay and workforce beyond 2015/16.

‘Therefore, HM Treasury will consider how continuing reform of public sector pay policy can best contribute to consolidation beyond 2015/16, including how to get the best value for money from the pay bill.’

The statement further underlined the Government’s commitment to continue to pool funding of health and social care, with the measures to continue beyond 2015/16. Mr Osborne announced that a £3.8bn fund will be used to jointly commission services across health and social care by 2015/16 in his spending review earlier this year.

The autumn statement said: ‘The government will support local areas that want to deliver services differently if they can show it will save money, including by… making sure pooled funding is an enduring part of the framework for the health and social care system beyond 2015/16.’

But, reacting to the statement, RCGP chair Dr Maureen Baker said the Government had ‘missed the opportunity’ to address underspending on the NHS.

She said: ‘After revealing a £7bn underspend across all government departments it’s deeply disappointing that the chancellor has missed an opportunity to address the funding crisis in general practice. NHS funding was completely overlooked and family doctors are gravely concerned that patient care is being compromised by declining resources.’

‘GPs carry out 90% of the contacts in the NHS for just 8.39% of the NHS budget. This is a decrease of one fifth since 2005. We are trying to manage greater demands on our time as an ageing and growing population seek care for increasingly complex, multiple and long-term conditions - this is not sustainable on a dwindling budget.’

‘The Government needs to invest in general practice as a matter of urgency, so that we can take the pressure off our hospitals, where medical provision is more expensive, and ensure that more people can receive care where they say they want it - in the community.’

A Department of Health spokesperson said: ‘In England, health spending increased by 0.5 per cent in real terms in 2012/13 and the NHS budget will continue to increase in real terms for 2015/16.’