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NHS does well from British budget

The chancellor, Kenneth Clarke, allocated an extra £1.6bn ($2.4bn), or 2.9% in real terms, for patient services. Another £525m is to come from efficiency savings of 2.7%, with an increase of 15p in prescription charges to £5.65 per item.

The new funding from next April amounts to more than £800m above inflation and was widely welcomed as averting a financial crisis in the NHS. Mounting deficits among trusts this winter can now be absorbed by the extra funding next year, with something to spare. About £25m will be available immediately to ease hospital bottlenecks and pressures on mental health services. The health secretary, Stephen Dorrell, said that the new money would ensure financial stability.

View larger version (114K): [in this window] [in a new window]   The government hopes that the extra NHS funding will avert a financial crisis this winter

Later in the week Mr Dorrell announced increased cash allocations to all 100 health authorities, increasing their average purchasing power by 2.4% in real terms, the individual allocations varying from 1.4% to 3%. In addition, Mr Dorrell is funding four new initiatives--in primary care, continuing care, mental health, and medical training. The details are:

* £100m for primary care and community services to promote innovation in general practice as envisaged in the white paper Choice and Opportunity (19 October, p 959)

* £100m to ease hospital bottlenecks and bed blocking by patients awaiting discharge. £20m will be available during this financial year

* £50m to support mental health services. An extra £5m will be available in this financial year to health authorities dealing with particular pressures

* £64m will be committed to expanding the number of training places for doctors and nurses.

Total current spending on the NHS in England for 1997-8 will amount to £33.04bn. Mr Clarke, said that the NHS remains at the top of the government's priorities.

Philip Hunt, director of the National Association of Health Authorities and Trusts, said that the extra funding would allow authorities to roll over some of this year's financial problems and meet next year's commitments, although the 2% allowance for inflation was low and would require a tight rein on costs and pay increases.

The BMA's chairman, Dr Sandy Macara, said that the funding was acceptable provided that the government held to its inflation target. The BMA also welcomed a double inflation increase in tobacco duty, raising the price of a packet of 20 cigarettes by 15p, to yield an extra £140m revenue.--JOHN WARDEN, parliamentary correspondent, BMJ

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