“Andrew Lansley needs to come clean and explain to the public why the 
government has broken the promises it made on the NHS – promises that were at the heart of the Tory election, central to the Coalition Agreement and repeated at the Spending Review.”
John Healey MP, Labour’s Shadow Health Secretary, 8 December 2010
Cathy Newman checks it out:
The Conservative pledge to protect the NHS from spending cuts was totemic – proof, David Cameron said repeatedly, that the Tories had changed. The Conservatives vowed to “guarantee” to increase health spending each year in real terms – that is once inflation was taken into account. October’s spending review seemed to deliver on that promise – just.
While multi-billion pound axes fell on other departments, NHS budgets were pencilled in to edge up by 0.1 per cent a year. But there’s a catch. If prices go up quicker than forecast, that 0.1 per cent real-terms increase – which leaves little room for error – would quickly be wiped out. (We examined this before.)
And now, just weeks later, new inflation figures already cast doubt on the rise. Labour is accusing the government of breaking its promise – are they right?
The analysis
According to the latest predictions from the Office for Budget Responsibility, NHS spending is facing a real-terms cut. In today’s money, the NHS will have around £260m less a year to play with by 2014/15.
When challenged on this yesterday in parliament, health secretary Andrew Lansley insisted the government was sticking to its commitment to protect the NHS.
“The spending review gave a real-terms increase in NHS funding,” he said. “That was the commitment we gave and it was set out in the spending review, and it remains true that revenue funding for the NHS continues to rise in real terms”.
So does that mean he’ll throw a bit of extra cash towards health to keep pace with any unexpected inflation rises?
A Whitehall source pointed out that inflation forecasts are variable and will change again in the future.
Cathy Newman’s verdict
Although the NHS budget hasn’t changed since October’s spending review, the latest inflation figures suggest that prices will increase more quickly than expected.
When this rise in inflation is taken into account, what looked like a tiny real-terms rise in NHS spending now looks like a tiny real-terms cut. So if the government wants to make its pledge of increased spending a reality, it will need to pump more money into the NHS. So far there’s no sign of them doing this.
These inflation figures are, however, just predictions at present. The next forecast could swing back the other way, leaving the NHS better off than expected.
It may be a slight exaggeration to claim, as John Healey did, that the government “has broken” its promises but it certainly will do if prices rise as predicted.
