Autumn budget 2018

29 October 2016

Short-term funding for adult social care

As part of the 2018 Autumn Budget, Chancellor of the Exchequer Phillip Hammond committed to an additional £410m Social Care Support Grant for councils in 2019/20 alongside £240m for them to cope with winter, in recognition of the 'immediate pressures local authorities face in respect of social care'. The £410m covered both children’s social care and services for working-age adults and older people meaning councils faced difficult choices about how to prioritise the funding. Additionally, local authorities were under pressure to increase the rates paid for social care because staff costs were increasing faster than inflation, partly due to the introduction of the national living wage.

End to private finance initiatives (PFI)

The Autumn Budget also marked the end of Private Finance Initiatives.

First used in 1992 under Sir John Major’s Conservative government, PFI encouraged the private sector to design, build, finance and operate infrastructure facilities through long-term contracts. PFI agreements were used to build hospitals, schools, roads and prisons, and their use increased under New Labour from 1997. In 2017, the value of all English NHS PFI schemes was £13bn, expected to cost £82bn in interest and principal repayments over the next 30 years.

In his statement, Philip Hammond proclaimed: ‘I have never signed off a PFI contract as Chancellor, and I can confirm today that I never will. I can announce that the Government will abolish the use of PFI and PF2 for future projects, putting another legacy of Labour behind us.’ He further announced the creation of a new centre of excellence to manage any existing contracts, based in the Department of Health and Social Care.

A new financial settlement for the NHS

In the same budget, the Chancellor confirmed a new financial settlement for the NHS for the next 5 years (first announced in June), increasing NHS England's day-to-day funding by £20.5bn by 2023/24 (in 2019/20 prices). The Health Foundation responded that although social care was receiving an increase in funding in real terms, rising pressures meant it would fall short of meeting demand and offered 'little scope to address unmet need or improve quality.'

Source(s)

HM Treasury.
Budget 2018 [webpage].
HM Treasury; 2018.

Cromarty H.
Adult Social Care Funding (England).
House of Commons Library; 2019.

Health Foundation, King's Fund and Nuffield Trust.
Budget 2018: What it means for health and social care.
Health Foundation, King's Fund and Nuffield Trust; 2018.

House of Commons.
Financial Statement: HC Deb, 29 Oct 18, Vol 648, CC 653.
Hansard; 2018.

Charlesworth A.
Response to the Autumn Budget 2018 [webpage].
Health Foundation; 2018.