Public spending is going to be squeezed in the coming years with the share of public spending to national income expected to fall from 48% this year to 39% 2017/18.
We can expect spending to be frozen or cut over the coming years with of course the knock-on effect to services and local communities suffering with less funding.
The NHS is not immune. It is already to make a 3% a year in savings and indeed has done so. However instead of these saving being allocated back into the budget for healthcare in the following year, it has been paid back in to the exchequer. Of the £5bn of cut in public spending for the next year, £2.3bn is expected from the NHS on top of the 3%.
The Healthcare budget is now cut from £104.6bn to £102.3bn. Although this is still represents a £4bn in growth this year.
The NHS confederation responding by concerns over further reductions after this coming financial year I note "The Confederation said that would require 'difficult decisions about priorities and change if patient care were not to suffer ..'."
With expected falling public expenditure spending on healthcare will reduce and it is where these cuts will happen and how it will affect HIV care moving forward that is of concern. Not least with "tarrifs" for treatment due to be introduced. This could result in less choice and control for patients.
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In his budget announcement chancellor Alistair Darling said that PCT allocations for the next two years will remain unchanged from the 5.5% growth rate announced.
‘Some have argued that we should cut public services immediately,’ he told the House, ‘rather than invest and grow our way out of the recession. That would be the wrong thing to do’.
But he also announced that public spending as a whole would grow by 0.7% from 2011 - well down from the the 1.1% rate previously expected.
If the DoH received its fair share of such cuts, it would mean health spending was £400m lower than expected in 2011/12.
Dave Prentis, general secretary of union Unison, warned against ‘damaging cuts to public spending’.
‘If the government wants to grow its way out of recession, public services must be the roots,’ he said.
‘And if you cut the roots, growth withers.’
Mr Darling also repeated yesterday’s announcement that public sector efficiency savings would rise from £5bn to £14bn a year by 2013/14. The DoH said that it would contribute an extra £2.3bn in savings in 2010/11.
But Northern Ireland's health minister Michael McGimpsey warned that such savings would inevitably impact upon patient care.
‘This must not be allowed to happen,’ he said. ‘The pace of the efficiency drive is too quick and is causing too much pain.’
Mr Darling predicted that the economy would contract by 3.5% this year, but bounce back to a 3.5% growth rate by 2011.
Other announcements included in the budget included a new top tax rate of 50% on those earning more than £150,000 a year, and limits on pension tax relief for the same income group.
Dr Richard Lewis, Welsh secretary of the BMA said: ‘We're pleased to see this rise in the cost of purchasing alcohol, but in our view, it doesn't go far enough.
‘Doctors have been campaigning for some time for higher taxes on alcoholic drinks, but crucially, this increase should be proportionate to the amount of alcohol in the product.
Today's rise announced by the chancellor won't necessarily end irresponsible promotional activities like happy hours and 2-for-1 offers, or the deep discounting carried out by supermarkets. A minimum price for alcohol, which we advocate, would put a stop to such practices, at the same as enabling pubs and bars to better compete with supermarkets.'
RCN chief executive and general secretary Dr Peter Carter said: 'Nurses will welcome the chancellor's commitment not to cut front-line services as a quick fix for the economic situation. However, the NHS is making a large contribution to the cost savings announced in this budget, and we cannot allow the quality of healthcare to suffer for the sake of short term savings. The NHS is vital in protecting the people on the sharp end of the economic downturn.'
Unite assistant general secretary Gail Cartmail said: ‘No area of the public sector - education, health and local government - will be spared these ‘efficiency' savings. It doesn't make sense to curb budgets as people hit by the recession need public services all the more.
‘We are seriously concerned by the costs of privatisation. The NHS is the most obvious example where the privatisation agenda has been aggressively promoted by private healthcare companies.
‘The first candidate for ‘efficiency savings' should be these misguided excursions into privatisation in all its guises.'
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Escalating fees from no win, no fee solicitors are hitting NHS patient care, the BBC
has been told.
Steve Walker, chief of the NHS Litigation Authority, said payouts for compensation claims and lawyer fees could only come from the NHS's budget.
And the BBC has also learned that a law firm acting for parents in the Alder Hey organ retention case tried to claim nearly £4.5m in costs from the NHS.
Lawyers argue costs rise because the NHS takes too long to settle claims.
Mr Walker said the NHS was facing an increasing number of claims from no win, no fee solicitors arguing these were more attractive propositions for claimant and solicitor.
The rising cost of litigation means the NHS has had to put aside a record £787m this year to cover the cost of claims.
Last year, solicitors suing the NHS received more than £91m in costs - nearly three times as much as solicitors acting for the NHS.
Cash diverted
Mr Walker told BBC Radio 4's File on 4: "The present system means there is too great a drain on public resources largely for the benefit of... claimant solicitors who are effectively recovering at a rate of perhaps as much as four times what we would pay our solicitors for doing the same quality of work."
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Mr Walker added, "There is only one source of money for the NHS....we have to pay claims from money that would be spent on patient care."
Law firms can earn substantially more in fees than their clients get in damages.
Documents obtained by File on 4 outline the disparities. In just one of many such cases a successful claimant was awarded £5,000, but their solicitor received £56,000. Another claimant received £7,000, their solicitor over £77,000.
File on 4 has been told that no win, no fee solicitors have charged as much as £800 pounds an hour and the programme has seen bills where a law firm charged more than £700 because their train was delayed and another charged £26 to "consider the arrival of a letter".
Late settlement
However medical negligence lawyer Russell Levy claimed that legal costs can rise because the NHS drags cases out.
"They hope the harder they make it and the more they discourage people, they will go away," he said.
He claimed the NHS lawyers often left settling cases until they were on the verge of a court hearing.
"By the time they accept the inevitable, it costs much more than it should."
The NHS is currently facing 6,000 plus medical negligence cases of which half are from no win, no fee solicitors.
If an NHS trust believes a costs claim is excessive it can challenge the costs at a hearing before a costs judge.
Alder Hey
Mr Walker told File on 4 in one case the NHS decided to fight a claim for £4,479,957.06 submitted by Liverpool firm E Rex Makin which had been working on behalf of parents in the Alder Hey organ retention scandal.
"We told them we wouldn't be paying and began at considerable expense to prepare for a hearing," he said.
After two months of negotiation the law firm agreed to accept £430,000 settlement.
E Rex Makin said the submitted bill included all items of work for which its solicitor believed he was entitled to recover payment.
The firm said its bill was never assessed by the court and the negotiated settlement that was reached with the Health Authority's solicitors reflected a number of technical arguments that were raised over the costs claimed.
Chancellor Alistair Darling has said voters are entitled to know about the government's future plans for cuts and spending before the next election.
Mr Darling told the Daily Telegraph public spending would be tighter than in the past and that it was important to "try to level with people".
He said the government could still hold a review of public spending before the general election.
Business secretary Lord Mandelson has suggested that had been ruled out.
Lord Mandelson indicated that a spending review planned for April next year has been delayed.
Labour and the Conservatives have been under increasing pressure to spell out their positions on how they are going to deal with the UK's biggest peacetime deficit.
In bitter clashes, Labour has accused the Tories of planning stinging cuts, while the Tories have accused Labour of being dishonest.
But in the Telegraph interview, Mr Darling said both parties are going to have tell voters, "the lie of the land" when it comes to which areas are going to be subjected to spending cuts.
He resisted being specific about where future cuts could come but indicated that nearer the election, the government would be more specific about the detail.
He added that with public spending so much higher than 10 years ago, there was scope for reduction.
Real terms cuts seem to be in the plan moving forward and are likely to hit next year. This will hit transport, housing and other capital intensive government departments.
Jonathan Baume, General Secretary of the FDA (Civil Servants Union) - "public services will remain in recession for perhaps a decade or more".