Autumn Statement 2023: what you need to know

Summary and analysis of what the Autumn Statement means for health and care.
Jonathan Barron

22 November 2023

Key points

  • There were no new major funding announcements for healthcare, and existing settlements will stay the same in cash terms. Instead, HM Treasury documents reaffirm recent commitments for:

    - £200 million of new funding announced in September 2023 to boost NHS resilience.

    - Funding the non-consolidated payment for 2022/23 for Agenda for Change equivalent staff.

    - More medical places starting September next year to meet the NHS Long Term Workforce Plan. 

  • The Chancellor announced a long-term cash freeze in investment spending. Alongside this, the Office for Budget Responsibility figures showed a downgrade for economic growth: 2024 has gone from 1.8 per cent to 0.7 per cent and 2025 from 2.5 per cent to 1.4 per cent.

  • Employee National Insurance will be cut two percentage points from 12 per cent to 10 per cent, with legislation being passed to introduce this from 6 January 2024.

  • The government will increase Universal Credit by 6.7 per cent and the local housing allowance rate to the 30th percentile of local housing market. The state pension will also increase by 8.5 per cent from April 2024, one of biggest ever cash increases. The National Living Wage will increase 9.8 per cent to £11.44 per hour and it will be extended to 21 and 22-year-olds for the first time.

  • The Chancellor said he wanted public sector productivity to increase by 0.5 percentage points a year. There was no further mention of the public sector productivity review, announced in the spring.

  • There will be increased support to help those who have mental health issues to find work, including by digitising the NHS Health Check. Building on the announcement from the Spring Budget, the government announced support for an additional 100,000 people to access Individual Placement Support over the next five years.

  • NHS Talking Therapies (previously IAPT) will also be expanded so an additional 384,000 people can access psychological therapies within five years. The increase in availability of NHS talking therapies should help more people access support at an earlier stage. 

  • In life sciences, the health research programme, Our Future Health will receive an additional £51 million to support its work in identifying ways to prevent, detect and treat diseases.

  • Genomics England, along with a consortium of partners, has launched a Rare Therapies Launch Pad generating evidence on whether a pathway for new therapies can be implemented in the UK for children with ultra-rare diseases.

  • The government has reached in-principle agreement with the pharmaceutical industry on the 2024 Voluntary Scheme for Branded Medicines Pricing, Access and Growth expected to deliver around £14 billion in savings to the NHS over the next five years.


Political analysis

  • Many of the challenges that applied last year remain, such as Russia’s invasion of Ukraine and the ongoing cost-of-living crisis. But this year we have also seen intensifying conflict between Israel and Palestine, the numbers of people too unwell to work continue to climb, and unprecedented industrial action across the public sector, including within the NHS.  

  • Meanwhile, a recent cabinet reshuffle has placed new ministers in charge of several departments including Health and Social Care, so it remains to be seen how priorities and perspectives may be impacted by this. Also, the government has used this Autumn Statement to attempt to establish itself as the party of economic growth and to set some dividing lines against Labour – we are likely to see more of this in the run up to the Spring Budget, which is expected in March 2024 where reductions to income tax, stamp duty and inheritance tax are already being suggested.

  • For the NHS, while inflation is receding, financial difficulties are still present such as the £10.2 billion capital backlog, many ICSs in deficit and the continuing cost of industrial action. Without significant new funding, as opposed to the repurposing of existing funding that is currently proposed, waiting lists will remain at record highs and the health service will continue to struggle on the back foot.  

  • Heading into the Autumn Statement, we were clear that NHS leaders needed to see urgent funding to address critical issues around workforce, capital and social care, as well as support for the NHS to take long-term funding decisions and a cross-governmental approach to health.  

  • This funding should be seen as an investment in the economy, as our research shows that investment in the NHS reaps huge benefits in GDP, with a £14 return for every pound spent in some parts of the system. 

Policy analysis

  • The Autumn Statement saw no significant health funding announcements. This is despite the Nuffield Trust estimating the NHS faces a £1.7 billion deficit even including recent attempts to reorganise £800 million of NHS finances. 
  • We also know how vital capital investment is to increase productivity. Decades of poor capital investment is one reason that the UK’s health productivity has not been able to meet its potential for the past 25 years. It is why we are fully behind the Chancellor’s desire to increase public sector productivity by at least 0.5 percentage points a year. However, there was no commensurate commitment to increase spending on capital and little demonstrating how this can happen in the absence of greater investment. 
  • We welcome the commitment building on the announcement in the Spring Budget to expand Individual Placement Support (IPS) to an additional 100,000 people over the next five years. The programme helps those with mental health needs to find and retain employment and it has a strong evidence base. 
  • Our members tell us that patients are presenting with higher complexity, therefore increasing the number of sessions is also welcome. Waiting times for talking therapies are too long in some areas, so we hope this additional capacity will help people access support more quickly.
  • As always, increases in capacity in the system depend on increasing financial resources, training and retaining the workforce needed. The government must ensure these commitments are backed with the resources required to implement them. 
  • While we support measures to increase employment for people with long-term health conditions, the proposals to increase conditionality and time limit benefits could increase poverty and health inequalities and may not support those furthest from the job market to find employment. This increase in poverty will have a negative impact on physical and mental health of the poorest people in society and therefore increase demand on all parts of the health and care system. 
  • The focus on shifting to a more preventative model of care with care being provided closer to home is welcomed and is an ask that our members have been reiterating recently through our major conditions strategy engagement.
  • Since the publication of the Khan Review in 2022, NHS Confederation has been calling for its implementation and welcomes the recent Smoke-Free legislation announcement and will be making a submission to the Smoking consultation. Healthcare leaders will welcome the government's use of regulatory and fiscal levers to improve population health, such as the 10 per cent increase in tobacco duty and freeze on alcohol taxes.
  • However, the Autumn Statement fails to reference the recent increase in health inequalities and the financial challenges local systems are facing to commit to long-term action on improving population health outcomes equitably. 
  • The in-principle agreement between the government and the pharmaceutical industry, the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), follows on from the VPAS (Voluntary Scheme for Branded Medicines Pricing and Access) scheme which will expire at the end of year. 
  • This new scheme will support access to innovative cost-effective medicines and is estimated to deliver around £14 billion in savings to the NHS over the next five years. However, whether these savings will be reinvested into drugs budgets remains unclear. The agreement also establishes a £400 million industry-established fund to support the life sciences ecosystem, including clinical trial capacity.
  • Members of our Primary Care Network will want further clarity on the changes to the Fit Note process, ensuring they are able to consult on plans for WorkWell Services. It's vital that changes to this process doesn’t disrupt the good work undertaken by primary care networks (PCNs) and GP federations through integrated neighbourhood working with local employment services.
  • Primary Care Network members nationwide continue to see increased demand as a direct result of patients awaiting elective treatment. This comes at a time of increased financial pressure for at-scale primary care across the country. 
  • The Autumn Statement includes a reference to introducing further scrutiny and a presumption against equality, diversity and inclusion (EDI) in the public sector. As we have raised with the government, we do not believe the NHS spends a large amount of its money on external EDI and NHS leaders know that EDI is a key strategic function that contributes to increased productivity, efficiency, patient safety and quality improvement.
  • Spending on external EDI assists in ensuring the service stays within the law by drawing on services close to communities to develop the delivery of equitable care. Governance also requires organisation and the mobilisation of a professional, skilled workforce. The government’s own commissioned review of NHS leadership and management, undertaken by General Sir Gordon Messenger made clear that dedicated EDI professionals were necessary to help in this endeavour.
  • While increasing the National Minimum Wage is welcomed, it will have an impact on the NHS, particularly in community services and primary care, which will need to see additional funding to cover these costs. This adds further pressure to primary care leaders.

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