Help with pay funding, say NHS chiefs

20 Jan 00
Finance managers have warned that the NHS could be in 'serious difficulty' if it has to fund the inflation-busting pay awards announced this week without further cash from the government.

21 January 2000

Both the Healthcare Financial Management Association and the Institute of Healthcare Management called for the money to be released or for the government to acknowledge that its modernisation programme would stall.

'It is a bit perverse for the government to acknowledge the pressures on the service and the need for more funding but then impose yet further pressure in this way,' said Barry Elliott, HFMA chairman. 'We need to see some of this extra money in the next financial year to help meet the costs of the pay awards.'

On Monday 1 million health service staff received pay rises of 3% or above, prompting NHS managers to call for more cash in the coming financial year.

Although English health spending will increase by 4.3% in real terms in 2000/01, health authorities and trusts said they could not fund the salary rises and carry out the government's modernisation programme.

Stuart Marples, IHM director, said: 'Our assumption is that the pay rise will be fully funded from the new money coming to the NHS, following Tony Blair's comments, and not require savings from existing service areas, further efficiency savings or further management cost reductions.'

The comments followed the prime minister's commitment on the BBC's Breakfast with Frost programme that he would use economic growth to bring health spending in line with other European countries by 2005. This could mean a rise of between £9bn and £16bn over three years.

Later, Blair's official spokesman backed away from this pledge, insisting the prime minister was merely 'signalling' the government's aspiration to increase health spending.

However, during Prime Minister's Questions on Wednesday, Blair said he was confident the government could increase spending by 5% in real terms over the next five years.


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