Reflections on the budget, pensions, workforce and strikes

David Hare, Chief Executive of IHPN, blogs on recent political developments, including reflections on the budget, pensions, the workforce challenge and the impact of strikes.

Budget reflections

Several weeks ago we saw the chancellor of the exchequer, Jeremy Hunt, deliver the spring budget – his first since taking the job back in October 2022 (if we cast our minds back), when he was parachuted in to pick up the reins after the somewhat disastrous mini-budget of the Truss/Kwarteng administration.

As a former health secretary, and latterly a challenging and outspoken chair of the Commons Health and Care Select Committee, the main question about Hunt since he entered No.11 Downing Street has been whether he would walk the talk.

After having been so strong from the backbenches on the need for continued investment into the health service, and specifically the need for a fully funded, costed long-term workforce plan for the NHS, would he now deliver once he had the keys to the Treasury?

Would this be a budget with health and social care at its centre?

Spoiler alert: the short answer is probably “no”.

But, there are some important elements worth noting which will have impact across the sector, and perhaps just as interesting is what wasn’t in the budget itself, but remain massive issues for the government.

Occupational health moves

The narrative around this budget was for a package of measures aimed at growing the economy, improving productivity and supporting people in the workplace, whether this be helping people to enter work, stay in work, increasing their working hours or extending their working lives, and there were some golden threads which pulled this together.

While this clearly wasn’t necessarily the top line news takeaway, one thing we were particularly pleased to see was some acknowledgement of the important role that employers (through occupational health) can and should play in supporting the health and wellbeing of employees.

We know that businesses are concerned about ever-increasing absence rates, and with NHS waiting times currently so high, it’s a good move to encourage employers to provide and develop occupational health, so employees can access the right support, keeping them fit and well.

The budget announced £400 million investment to increase employment support for mental health and musculoskeletal problems. This will involve scaling up MSK hubs by turning community hubs and leisure centres into MSK hubs so more people can access treatment.

David Hare, CEO, IHPN

It also announced expanding the funding for the upcoming small and medium sized enterprise subsidy pilot for occupational health services, as well as bringing forward two new consultations seeking to improve occupational health, covering potential regulatory options and tax incentives.

We’ve worked hard to make the case to government in recent months, so it was very encouraging to see these steps taken, and we look forward to further progress through the consultations.

Pensions progress

One of the longest-running workforce issues facing the NHS particularly has been around pension rules which have impacted consultants across the country.
The punitive impact of the current arrangements undoubtedly have had an enormous impact and completely disincentivise senior medical colleagues particularly from continuing to work – in some case it literally costs them to do so.

Hunt announced that there will be an increase to the annual pensions tax free allowance from £40,000 to £60,000, with the aim of incentivising highly skilled individuals to remain in the labour market for longer.

Meanwhile, the pensions Lifetime Allowance which currently sits at £1.07 million will be abolished entirely (there had been earlier briefing that the cap might just be raised).

The policy itself was pitched quite clearly and overtly to target and resolve the issue for doctors specifically. In that respect, many colleagues have welcomed it, including the British Medical Association (BMA), so a tick in that box.

However, by avoiding some kind of ring-fencing around doctors (admittedly very complex), it ended up taking fire for being a windfall for all top earners.

It’s the workforce, stupid

As noted at the top of this column, it’s undoubtedly the case that the elephant in the room remains the absence of a costed, funded long-term workforce plan for the NHS. This is something that sector leaders have been calling for consistently, and at increasing volume and frequency. It’s still not here, and the longer that it remains absent, the more concerns will grow.

This context, with an increasingly disillusioned workforce (the NHS staff survey results out recently paint a particularly bleak picture), has meant the stakes on pay have been raised even further.

So, it was good news to hear, the day after the budget, that the government had agreed an ‘in principle’ deal with the unions (but not including junior doctors). However, there remains a lot of ground still to cover and significant questions remain.

Our view, along with many other sector leaders, is that the funding for the deal should not come from existing NHS budgets. At the time of writing, it was not totally clear that this was the case, so that remains a point of contention.

And, even if that point is resolved, there are no guarantees that the memberships will actually accept what’s currently on the table. Add into that the fact that negotiations with the junior doctors haven’t even begun yet, and it’s clear we’re not out of the woods yet.

On that point, the 72 hour junior doctor strike, which coincided with all this, was the largest piece of industrial action so far, and probably the most disruptive.

From an independent sector perspective, we were encouraged that the impact was actually not as severe as feared – our working group of senior clinicians across the sector reported that operations were not dramatically impacted, this time.

However, the NHS reported that 175,000 appointments were missed as a result of this one action. That’s a huge number of patients impacted, appointments to rearrange, procedures to rebook. With over 7.2m people still on the waiting lists, we need to hope that this doesn’t turn into a long-running issue, or patients will suffer the consequences.

*This blog is an updated version of an earlier column which appeared in Healthcare Markets