Published in the minutes following the Chancellor’s Spring Statement, the Office for Budget Responsibility’s fiscal forecast raises alarm over post-pandemic health pressures

The £13 billion a year for the NHS announced in the Chancellor’s Autumn Budget last year comes at a time of “extraordinary pressure” for the health service, the Office for Budget Responsibility (OBR) has said.

In its Economic and Fiscal Outlook, published following Rishi Sunak’s Spring Statement this week, the OBR states that, while pandemic pressures have “eased somewhat”, the increase in funding promised by the Government “arrives at a time where several indicators point to intense pressures across the health service”.

The outlook was published on 23 March 2022, two years after the start of the first lockdown when people across England were told to stay at home and protect the NHS. 

The pressures on the NHS are most visible with increased waiting times, including an 100-fold increase on patients having to wait for more than a year for non-urgent care.

In 2019, of the 4.2 million people waiting for non-urgent care, only 0.1% had to wait longer than 52 weeks. As of December 2021, the waiting list had grown to 6.1 million with 5.1% waiting longer than a year.

At the same time, 31% patients in need of non-urgent care are waiting for 18-52 weeks, an increase from 13.2% in 2019. 

This has been exacerbated by staffing pressures, with vacancies in the NHS rising since the start of the pandemic to 22,900 in July 2021. Vacancies were at 15,900 in January 2019.

Even more concerning is that the numbers of people waiting for non-urgent, ‘elective’ care could be higher than estimated.

New referrals for non-urgent care dropped off at the start of the pandemic – in early 2020 there were just under 1.8 million referrals for non-urgent care, a number that reached a low of 500,000 in the first lockdown. The pre-pandemic average was around 1.5 million. 

As a result, there are fears that around 10 million people who might have otherwise come forward for treatment have yet to do so, risking a health crisis down the line. 


The Missing Millions

The Institute for Fiscal Studies (IFS) has modelled various scenarios on the impact of waiting lists should those patients come forward for treatment in the coming months. It found that, if as few as 30% approached the NHS for treatment, waiting lists would continue to increase until June 2023, when they peak at 7.4 million before returning to current levels in September 2024. 

Should 50% of patients come forward, waiting lists would reach 8.7 million in October 2023, and if 80% of those ‘missing’ patients refer themselves for non-urgent care, lists would hit 10.8 million in December and never return to pre-December 2021 levels. 

From an economic perspective, the OBR said in its outlook that “to the extent that such pressures – or indeed broader pressures from pay and inflation – were accommodated in higher budget allocations, that would represent a risk to our forecasts”. 

However, policy risks from NHS spending “could well still remain to the upside”.

Analysis by the IFS found that, between the 1982 Autumn Statement and the 2015 Spending Review, there have only been two occasions when health spending has risen by less than was originally planned.

The resource spending plans for the NHS set out in the Autumn Budget were, according to the OBR, consistent with average real annual growth of 3.8% in the NHS between 2021-22 and 2024-25, broadly in line with this historical average. 

The OBR explained that revisions to its GDP deflator forecast since October mean that the real growth rate consistent with its latest forecast is 3.3%.

“Despite the £13 billion increase to NHS funding at the 2021 Spending Review, policy risks from NHS spending could well still remain to the upside,” the forecast concluded.

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