22 Sep 2005
Chronic underspending on the NHS throughout the 1980s and 1990s was grossly underestimated and as a result a high proportion of the extra investment in the health service since 2002 has been spent compensating for previous funding shortages.
That is the verdict of a new report published by the NHS Confederation, which represents more than 90 per cent of NHS organisations - 'Money in the NHS: the facts' has been produced halfway through the government's programme of extra investment in the NHS from 2002/03 to 2007/08.
Dr Gill Morgan, Chief Executive of the NHS Confederation, said: "The impact of underinvestment in the NHS during the 1980s and 1990s seems to be much greater than was first anticipated. Much of the 'new' money has had to be used to compensate for previous cost-cutting in order to improve patient services."
The NHS Confederation report demonstrates that in 2004/05 73 per cent of the extra £5.9 billion investment in the health service was spent on existing services that were neglected in the past.
Dr Gill Morgan says: "The barrage of criticism that the NHS is often subjected to is misplaced - suggestions that the NHS has failed to increase productivity and use the new investment effectively are unfair. Official figures show that waiting lists and waiting times have both dramatically reduced since 2002 despite the fact that the NHS has been facing a legacy of underinvestment.
"Much of the 'new' money being invested in the NHS is being spent on buildings, increased costs of drugs and technology, more and better paid staff which will, over time, allow the health service to deliver improvements to patient care."
The NHS Confederation report shows that 50per cent of new investment was spent recruiting more staff and paying higher salaries through pay reforms for existing staff - £2 billion (30 per cent) of the extra funding in 2004/05 was spent on increasing salaries while £1.4 billion (20 per cent) of the new money was spent on recruiting new staff.
Dr Gill Morgan says: "money must be spent on keeping wages competitive because high quality patient care can only be delivered by valued and motivated staff who are paid a decent wage and savings will be made in the long term as recruiting and retaining staff becomes easier.
"And recruiting new staff is vital to improving patient access to NHS services, reducing waiting times and improving standards of care."
"The results of this investment in staff may not be obvious straight away but we believe that over time the benefits will become clear - more frontline staff who are paid better wages will improve the care that patients receive. To say that this investment is not delivering better patient care is false."
An extra 89,000 frontline clinical staff were recruited to the NHS from 1999 to 2004:
'Money in the NHS: the facts' is being published in advance of the NHS Confederation's fringe meeting at next week's Labour Party conference, hosted jointly with the King's Fund and Diabetes UK, entitled 'How will the NHS survive if the money stops?'.
The Secretary of State for Health, Patricia Hewitt MP, will be speaking at the fringe event which will take place at 7pm on Monday 26 September at the Old Ship Hotel in Brighton.
Ends
1. The NHS Confederation represents more than 90 per cent of the organisations that make up the NHS throughout the UK. Its members include the majority of NHS trusts, foundation trusts, primary care trusts and health authorities in England; trusts and local health boards in Wales; NHS boards and special boards in Scotland; and health and social service trusts and boards in Northern Ireland.
2. The Health Hotel is a collaboration of 36 organisations who have joined together to promote the health sector. This unique coalition aims to raise awareness of health issues at the three main party political conferences and is hosting a series of fringe events and receptions at each of them.
3. The Health Hotel will be at the Carlton Hotel, North Promenade, Blackpool for both the Liberal Democrat and Conservative Party Conferences, and at the Old Ship Hotel, King's Road, Brighton for Labour Party Conference.
4. Full details of the Health Hotel's programme of events can be found at www.healthhotel.org.uk
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Last reviewed 9 Nov 2006