UK: Now You See It Now You Don't: Can The Spending Review Deliver A Sustainable Health And Social Care System?

Last Updated: 1 December 2015
Article by Karen Taylor

Most Read Contributor in UK, August 2017

At 12:30pm on the 25th of November the long awaited and much rehearsed 2015 Spending Review was announced. Speculation about its content has been rife but, as the Chancellor set out how much government funding will be available for the NHS and social care over the next five years, the debate about whether the settlement will be enough to ensure the sustainability of the service commenced. This week's blog considers the main details of the settlement and discusses what this might mean for health and social care.

In summary, the Government's settlement for the NHS and social care includes:

  • £8 billion real term increase in NHS funding in England between 2015-16 and 2020-21, of which £6 billion will be delivered by the end of 2016-17
  • £4.8 billion capital funding, frozen over the next five years
  • integration of health and social care services by 2020, supported by up to £2 billion hypothecated local taxation
  • encouraging partnerships between the NHS and private sector to modernise buildings, equipment and services and deliver efficiencies
  • replacement of education grants with student loans and abolishing the cap on the number of student places for nursing, midwifery and allied health professionals
  • £22 billion efficiencies within the NHS by 2020-21, with savings reinvested into frontline health services, as set out in the NHS's Five Year Forward View (5YFV) and actions to tackle deficits and ensure good financial management across the NHS.1

There was also specific mention of a £1 billion investment in new NHS technology, £600 million for mental health services and the need to transform the NHS into a 7-day service. However whether this is additional funding or included in the £8 billion is still unclear.

While, at first glance, the above looks like a successful outcome for the NHS, as the details become clearer the initial optimism is fast disappearing. A key concern is the fact that many of the requirements were stated in the 5YFV, however, at the time, the true extent of the current NHS financial crisis was not known. We now know all too well that key targets are being missed; concerns about the quality and quantity of mental health services are increasing; and three quarters of trusts are in deficit. Indeed, NHS providers are expected to end 2015-16 some £2.2 billion in the red.

Despite the additional funding, the NHS is still facing its most austere decade since its inception, with public funding for the NHS falling as a share of GDP to 7.4 per cent, making it one of the lowest of any developed country. In looking at the current financial challenges in the NHS, what is evident is that the increase in deficits is escalating at pace, with nearly 80 per cent of providers overspending by a total of £1.62 billion in the first half of this year alone. This is a significant deterioration of financial performance compared to the same half year point last year when providers' deficit was £6.36 million (in 2015/16 prices), with 58 per cent of trusts in deficit after six months into 2014/15.2

There is also the requirement to achieve a £22 billion efficiency saving by 2020-21. Although there are undoubtedly opportunities to improve productivity and reduce variation, £22 billion is equivalent to 2-3 per cent efficiency savings per year, something that has previously proved difficult to achieve and certainly not likely when NHS providers are already in deep financial trouble. A survey by the Healthcare Financial Management Association3 shows that about nine out of 10 NHS finance directors doubt that their organisations can deliver efficiency savings in the range of 2-3 per cent per year.

Furthermore, while the Government's front-loading of the settlement is welcome, it is predicated on reductions in funding for other parts of the health service. Indeed, a significant chunk of the extra funding promised to NHS England has been secured by cutting the £15.1 billion non-ring fenced Department of Health budget by £2 billion in cash terms by 2020-21 (a 21 per cent reduction). The bulk of those cuts falling on the £10.3 billion pot of revenue funding that pays for things like health education, public health, and the operation of arm's length bodies, such as the Care Quality Commission. However, these are not 'back office functions' indeed both Health Education England and Public Health England, provide key elements of front line care, from funding junior doctor workforce placements to key prevention services such as vaccinations, sexual health and stop smoking services.

Meanwhile the settlement for social care, while offering some semblance of relief, will only reach £2 billion by 2020-21, if all councils take full advantage of their ability to introduce a two per cent precept on council taxes. Compared to the estimated requirement of an additional £6 billion to meet the social care funding gap by 2020, this lever does not come close to closing the funding gap between demand and current capacity. Indeed, most of this extra money will be swallowed by simply keeping the lights on.

As the 5YFV and numerous other policy documents have acknowledged, a key way to address the health and social care funding gap is through the adoption of digital health technology. However, the £1 billion pledged for investment in new technology over the next five years falls far short of the amount that the Department of Health suggested was needed (£3.3 to £5.6 billion).4 Furthermore, the queue for the use of these resources is growing by the day. These include the need for interoperable electronic health records, improved access to information, and the efficient delivery of telehealth and telecare services to support care closer to home. These digital health services are key enablers of service transformation but will require much more funding than the offer on the table. 

Finally, the need for integration of health and social care is supported by a proposed increase in the Better Care Fund. And, without doubt, integration of health and social care is the right direction for improving services for the more vulnerable and frail members of society. However, unless some of the key structural and cultural issues are addressed, any additional money will have limited impact. To avoid social care becoming marginalised and realise the much needed integration agenda, it will require genuine pooling of budgets, risk sharing and changes to funding and tariff arrangements. Furthermore, the cost of transformation and the time taken to achieve it should not be underestimated.

The period covered by the 2015 Spending Review will be the most challenging in the history of the health and social care system. While the government's commitment to increase the NHS budget in real terms by £8 billion by 2020 is clearly welcome , this appears to be the absolute minimum requirement to maintain standards of care. One thing is certain, both services will need to respond simultaneously to growing pressures while putting in place large-scale changes needed to ensure their future sustainability. Failure to do so will mean long waiting times for patients, deterioration in quality of care, and far fewer people receiving publicly funded social care.





The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.