RCPod comment on the 2024 Spring Budget

Although one may think this was Chancellor of the Exchequer's last budget before the most anticipated general election in a generation, the likelihood is that there will be an Autumn Budget/Statement before the nation goes to the polls. The Chancellor’s aim in this budget appeared to be showing the public that he and the Prime Minister are fiscally responsible, unlike their predecessors.

Before the budget, the College, along with the other trade unions in the TUC, wrote to the Chancellor to state that it needed to invest in public services because continual underinvestment is having a detrimental effect on people’s lives, causing highly qualified people to leave public services in droves.

In a recent interview, the Chancellor said: “What we want is better public services. That doesn’t always mean spending more money. Sometimes it means spending less money, but we need to run them more efficiently.” Sadly, we have witnessed public services become so underfunded, that there is no fat trimming or efficiency saving left. The College would welcome a blueprint from the Chancellor on how to run public services – specifically the NHS – that are suffering from a reduced workforce, and increased workload in numbers and complexity. 

In the Spring Budget, there were no real surprises as the majority of the headlines had been leaked to the press by the Treasury over the previous week. The reduction in National Insurance contributions will mean a reduction from 10% to 8% for PAYE employees, and the self-employed will see a reduction from 8% to 6%, amounting to approximately £450 per year for the average employee or £350 per year for the average self-employed person.  

The Chancellor announced a £5.9bn investment in the NHS in England, as healthcare is devolved. He also announced a £3.4bn investment in the NHS through a productivity plan. Only £2.6bn of this is new funding. £1.2bn is already in the NHS’s budget for 2024/25 and had been announced previously. NHS England has committed to achieving a 1.9% productivity growth from 2025/26 to 2029/30.  

Of the £3.4bn, £430m will go to improve the NHS app. £1bn will be used to improve the use of data in the NHS by reducing ‘time spent on unproductive administrative tasks’. This includes the accelerated roll-out of a Federated Data Platform across all NHS Trusts by the end of 2026/27. This will also be used to create staff digital passports  to allow staff to move within the NHS more easily, as well as the use of AI technologies to undertake administrative tasks, including clinical coding of notes and discharge summaries. £2bn was allocated to upgrade outdated IT systems across the NHS, including a full rollout of electronic health records across all NHS Trusts in England by March 2026. 

The Chancellor said that antiquated systems in the NHS mean that nurses spend their time filling in forms rather than providing care and that investment was needed to modernise NHS IT. He also said it would reduce admin and save 13 million hours of time doctors spend on poor IT. As an ex-Health Minister, he knows that doctors are not the only clinicians in the NHS, yet here we are again in the reductionist world of Parliament. He also said that this investment would unlock ten times that level in savings. As Health Minister, Jeremy Hunt had challenged the NHS to go paper-free by 2018. He said that the increased rollout of the NHS app would reduce the number of missed appointments by 50%. There was no mention of funding pay to keep pace with the cost of living and the independent sector to aid workforce retention. 

There was barely any mention of social care, the part of the health service that is too expensive and too difficult to deal with, yet vital in ensuring the flow of patients from hospital wards. There is a need for increased investment in intermediate care to allow people a rehabilitation space before returning home.

Also absent was local government, given that people’s local environment and the lack of investment in them is likely to affect how they feel about the state of the country overall. At a time when Birmingham City Council has gone bankrupt, and six others are on the verge of declaring bankruptcy. 

Taxing those with non-domicile status, originally a Labour flagship policy proposed in 2015 by Ed Miliband, had been roundly dismissed by the government until they realised to steal this policy and use the money to out-manoeuvre the opposition. 'Non-dom' status allows someone to live in the UK all year round, whilst claiming another country is their permanent home. This provides tax breaks to some of the UK’s wealthiest residents, allowing them not to pay tax on investments they have abroad. 30% of those with incomes over £5m make use of the tax break. It has been estimated that this could raise £3.8bn. The Chancellor said it would raise £2.7bn per year. In 2022/23, the Treasury received £1,027bn in tax, so a drop in the economic ocean.

Public services reform, which the Chancellor continually referenced, will be problematic when the overall resource given to public services over the next five years is not growing in real terms, based on the growth in the population and required growth in wages to keep pace with inflation. The Chancellor went on to say that economic growth would not be sustained through migration. Richard Hughes, the Chairman of the Office for Budget Responsibility, said that levels of net migration are likely to increase over the next five years, which would normally increase growth in the economy. Yet the levels of people of working age who are not working offsets any likely growth.  

The country is officially in recession, wages have stagnated, homelessness is at a record high, high streets are awash with boarded-up shops, house building appears to have stalled, and food bank use has dramatically increased. The Chancellor said the economy has turned a corner, and that inflation is down, and growth is increasing. However, like Ronald Reagan asking the US electorate in 1980 whether they felt better off than they were four years ago, Labour is likely to pose the same question, but drawing on a fourteen-year timescale.  

This budget is unlikely to move the opinion polls in the government's favour. However, the Prime Minister and the Chancellor wish to show that they are fiscally responsible, unlike their predecessors, whilst providing their party with the tax cuts it expects. There is an assumption that the government will call a general election in the autumn, and a September budget statement will provide further pre-election tax cuts. When Rishi Sunak was Chancellor, he said he would do this. Labour’s challenge is that there will be an increased media focus on their plans and about how they are going to pay for them. A Labour government will wish to reassure markets and the right-wing press that they are fiscally responsible. They will no doubt have to increase taxes; Gordon Brown was famous for stealth taxes, and Rachel Reeves is likely to do the same, but she has ruled out an increase in corporation tax.  

It could be perceived that this budget aimed to make things as uncomfortable as possible for an incoming Labour government and increase the likelihood of hindering growth. There is a fight for the future direction of the Conservative Party. Certain factions within it are calling for it to be bolder. Yet the party has to contend with a new threat - the possibility of some of its core voters defecting to Reform UK. It was UKIP’s insurgence in the middle of the last decade that prompted the party to move further to the right to dissuade some of its backbenchers and voters from searching for a new political home. They may face that challenge again and find it necessitates a political response.

The College will ensure that it engages with whoever is in power to ensure that the preventative aspect of podiatric care can be better realised across all areas of health and social care to save money and deliver a healthier country. 

Royal College of Podiatry
7 March 2024