The FT has reported:
At the end of last year, the health department asked hospitals to make efficiency savings of 4 per cent a year as the first step towards £20bn of productivity improvements. But Monitor, the foundation trust regulator, calculates that hospitals must make savings of 6-7 per cent a year to be certain of balancing their books.
Monitor told hospitals applying to become foundation trusts that the bigger efficiency challenge resulted from higher-than-expected inflation and changes to the way hospitals are paid.
Let's not beat about the bush. Health experts have said saving 4% a year is nigh on impossible: the pace of change is too high. Now it is to increase.
And it's to increase for purely financial reasons. Most importantly inflation is not going to be covered. I should be explicit about what this means when uncoded.
The unanticipated inflation is the result of an increase in VAT. Unlike most businesses hospitals pay VAT, and quite a lot of it, because what they supply is VAT exempt but what they buy still has in many cases (including on agency staff) VAT charged on it.
So what has happened is that the VAT paid by hospitals has increased and as a result frontline healthcare in the UK is going to be cut, significantly, to the point of reducing hospitals to a state that experts predict will be chaotic .
Blame the Tories when people die as a result, as they will. There's no one else at fault.
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Hospitals shouldn’t be unduly concerned with balancing the books. The success of a hospital can not be measured in financial terms. The output of a successful hospital is healthy people who will then go on to participate in the creation of wealth. Trying to make hospitals profitable financially – or even financially break-even – entirely misses the point of having a health service in the first place. The only reason people are saying different, politicians and businessmen alike, is they’re profiteers desperate to get their hands on that huge enticing pool of public money, just like the ATOS, the company supposedly testing benefits claimants with with irrelevances such as touching their nose and bending and touching their knees, is currently doing.
BB
This is pathetic even by your standards.
Why wasn’t this an issue when VAT increased from 15% to 17.5%? Why is it only an issue when VAT exceeds 17.5%? How do other European countries cope with much higher VAT rates?
Can you try arguing?
There was no issue on 15% – 17.5% because no one was imposing cuts as a result.
And there’s no problem in Europe as they’re not increasing VAT.
So your arguments simply don’t stack.
The reality is that VAt is being charged and it is imposing cost on the NHS and people will die as a result.
Answer that and try to stop the abuse.
If VAT has increased the rate of inflation by, say, 2.5%, and the Tories have pledged to increase spending on the NHS in real terms, then spending in monetary terms will have to go up a corresponding amount.
Granted, the NHS are going to have a tough time because of increased demand more sophisticated treatments, but not because of changes in the price level caused by VAT, surely.
Read the story – it’s inflation that is causing the cuts
They’re not making good in real terms
Your argument is wrong, mine right
Sorry
The Tories are causing these cuts but the Tories are just the vehicle of the City … A McKinsey man heads Monitor and McKinseys have signed up to act for more GP consortia than any other private commissioning firm so far.
Precisely!
Others conveniently ignore these facts.
Nothing to do with self interest, surely?