Ministers have rejected pleas from the NHS for an emergency £1bn bailout to cover the rising cost of the strikes that have badly disrupted services this year.
On Wednesday, NHS England will announce that it is handing £800m to health service trusts to help them pay bills incurred by industrial action and prepare for the winter ahead.
However, none of the £800m is new money from either the Treasury or the Department of Health and Social Care, the Guardian understands, despite the NHS’s repeated requests for at least £1bn of extra funding.
The government’s decision to rebuff those demands will come as a major disappointment to NHS chiefs. They believed that months of talks with ministers and officials would lead to the service receiving an unscheduled boost of at least £1bn of genuinely new money.
The news is also a blow for Steve Barclay, the health secretary. He has been lobbying the Treasury to find the £1bn that NHS bosses had made clear was the least that hospitals needed to help them cope with the extra costs strikes have imposed, such as paying staff to cover for colleagues on days of industrial action.
Of the £800m that will be announced, £600m has come from NHS England repurposing money earmarked for several improvement initiatives while the other £200m is money that Barclay announced in September to help the NHS navigate its traditional winter crisis.
There was cautious optimism in the NHS that Jeremy Hunt, the chancellor, was sympathetic to its request for in-year financial aid, given his deep understanding of the pressures it is under based on his six-year stint as the health secretary from 2012 to 2018.
Hunt and Rishi Sunak could now face claims that they have denied the NHS money it sorely needs to instead put it towards tax cuts before next year’s general election.
The government is thought to have £13bn-£15bn of “fiscal headroom” – money it can chose how to spend before polling day. One senior NHS figure said: “A lot of Tory MPs would see giving the NHS £1bn extra as not a good use of that money, especially as so many of them see the NHS as a bottomless pit of money anyway, and particularly as so many of them want Hunt to be able to announce personal tax cuts.”
NHS England will announce that it will be distributing £800m of extra cash to its 42 integrated care systems (ICSes) – regional groupings of trusts – many of which are on track to end the 2023/24 financial year in debt, with some potentially facing an overspend of more then £100m. Rising drug prices have added to their running costs, on top of spending on strikes.
Julian Kelly, NHS England’s deputy chief executive and finance chief, made clear at its board meeting on 5 October that staff walkouts had cost the service £1.1bn by the end of July alone – and that it needed the government to cover that cost.
In a briefing to the board he wrote that: “ICSes’ financial positions continue to be impacted by the ongoing industrial action, which is driving additional expenditure as well as impacting on efficiency delivery.
“Without further support for costs of industrial action there is significant risk that many systems will overspend this year. To the end of July we have estimated a cost impact of –£550m and described lost activity [cancelled operations] valued at a further –£500m.”
Matthew Taylor, the chief executive of the NHS Confederation, which represents trusts, gave a clear insight into the NHS’s expectations last Saturday. He told the Financial Times that trusts needed the unexpected £1bn gap in their finances to be “plugged without delay”.
In a warning of potential cuts to services unless the money was forthcoming, he added that: “if it cannot be compensated in full, the NHS will need to understand from the government how it intends to adjust expectations on what its services will deliver with the resources available.”
