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Concern that NHS may be forced to pay for new tax cuts

26 November 2008

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The chancellor’s £20bn gamble to drag the UK out of recession could, in part, be paid for by cuts in the NHS, according to reports.

In the pre-Budget report, Alistair Darling (pictured) indicated that an extra £5bn must be gathered from annual public-sector efficiency savings by 2011.

A proportion of this is expected to come from PCTs throughout England and Wales, the Health Service Journal believes.

Mr Darling confirmed a temporary cut in VAT from 17.5% to 15% from 1 December, and announced huge increases in the amount of borrowing.

The chancellor insisted the VAT reduction was equivalent to the government giving £12.5bn to consumers. VAT rates will return to 17.5% in 2010.

An extra £100m has been earmarked for upgrading 600 GP practices. The new training practices are part of Mr Darling’s attempt to jump-start the economy by bringing forward planned investment from 2011 into the next two years.

But he said tax cuts needed to be paid for in the form of an increase in the public sector “recoverable savings” target for 2010-11 from £30 billion to £35 billion.

The Treasury believes there is scope for part of that to come from the £70 billion NHS commissioning budget.

“As PCTs enhance their commissioning skills over the next years they will develop their strategic and financial plans to ensure they unlock cashable value for money improvements across the £70 billion of commissioned health services,” the report said.

Copyright © Press Association 2008

The Treasury

Your comments (terms and conditions apply):

“This is an indication of the desperation of the current situation the government has created. I think the majority of us could easily identify a complete waste of PCT money, however, in GP-led health centres/Darzi clinics. Spend less of the money earmarked for those and instead invest it in current practices. The £1 m a year, plus all the management costs for the tendering exercise, could easily cover the majority of the savings.” – Name and address supplied