Blog 11th July 2017

Blog 11th July 2017

In this week’s blog, I write about National Health Service Finances, the AWICS Scotland News, Cumbria County Council’s finances and the localisation of business rates, the state of the United Kingdom economy and Service Charges in Wales.

The National Health Service is one of Britain’s most popular institutions. It is also a very large institution, spending over £100billion a year and employing over a million people. However, the organisation of the National Health Service is often seen to be complex, its financial management arrangements difficult to understand and the financial challenges that it faces numerous. It is often said that the National Health Service is in ‘crisis’.

I have written a briefing paper that provides an overview of the finances of the National Health Service in England and of the financial challenges that are faced and that provides some commentary. It includes sections on:

• Health Service Structures in England (National Health Service England, Clinical Commissioning Groups, Health & Wellbeing Boards, Public Health England, Vanguards, Regulation, Primary & Secondary Care)
• National Health Service Trusts (Foundation Trusts, Acute Trusts, Ambulance Trusts, Mental Health Trusts)
• Example: Cumbria Partnership National Health Service Foundation Trust Accounts
• Funding National Health Service England
• Comparative Spending
• Demand for Health Care and the Need to Spend
• Integration with Public Health and Adult Social Care
• Challenges for the National Health Service (Brexit and International Relations, Inflation and Supplies from outside the United Kingdom, Recruitment and Retention)

My conclusion is that the level of resources remains the main issue; and that an effective National Health Service needs to be adequately resourced.

Your copy can be freely downloaded from HERE

Last week we published the July edition of the ‘AWICS Scotland News’. It includes articles on:

• Scottish Government announces Affordable Housing Programme                                     
• Housing with Care                                                     
• Public Sector Pay Cap                                                          
• Scotland’s National Health Service leads by example                                                         
• Life Chances of Young People in Scotland                                                   
• Employment Prospects for Disabled People                                                 
• Coastal Communities Fund                                                   
• Local Authority Provisional Outturn (2016-17) and Budget Estimates (2017-18)    

Your copy can be freely downloaded from HERE

Councillor Stewart Young, the newly re-elected Labour Leader of Cumbria County Council has highlighted the financial uncertainty facing local authorities, following the government’s decision not to proceed with the full localisation of business rates. He told ‘In-Cumbria.com’ that:

“By 2020 our government grant will have disappeared but the arrangements to replace that haven’t been agreed and we are told are now not going to be agreed… They will have to come up with some kind of fix, but it just creates this uncertainty which makes it very difficult to plan because you really don’t know how much money you will have. You can predict two years ahead but after that you have no idea.”

This issue, of course, affects all local authorities. It will be interesting to see what ‘kind of fix’ is arrived at!

There has been some interesting economic news recently:

• Prices are now increasing faster than incomes and, for the first time since the 1970s, disposable income has fallen for three quarters in a row.
• It appears that households have responded by maintaining their spending by borrowing more and drawing down their savings. The Office for National Statistics calculates that Britons saved only 1.7% of their income in the first quarter of this year, the lowest savings rate since comparable records began in 1963. In the intervening 54 years, the ratio has averaged 9.2%.
• The Institute of Directors has found that business confidence and hence investment is reducing. Investment in the car industry fell 30% last year and is dropping at an even faster rate this year, according to the Financial Times.
• Export orders are expanding at the weakest rate in five months despite the low value of Sterling.
• Public borrowing continues at a high level.

The economy therefore appears to be increasingly dependent on high levels of public and private borrowing, with demand from exports and investment weak. In my view, this will prove to be unsustainable and a contraction in the economy appears inevitable. This would be disadvantageous for public services as government would face a ‘perfect storm‘ of declining revenues, increasing capital financing costs and less access to borrowing.

Our next seminar is on ‘All You Want to Know about Service Charges in Social Housing in Wales’ and will be held in Cardiff on 12th September 2017. For further information or to make a booking, please click HERE