{"id":9795,"date":"2011-04-29T08:50:55","date_gmt":"2011-04-29T07:50:55","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=9795"},"modified":"2011-04-29T08:50:55","modified_gmt":"2011-04-29T07:50:55","slug":"hospitals-to-cut-services-by-3-to-pay-for-vat-increases-blame-the-tories-when-people-die","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2011\/04\/29\/hospitals-to-cut-services-by-3-to-pay-for-vat-increases-blame-the-tories-when-people-die\/","title":{"rendered":"Hospitals to cut services by 3% to pay for VAT increases – blame the Tories when people die"},"content":{"rendered":"

The FT has reported<\/a>:<\/p>\n

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 \u00a320bn 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.<\/p>\n

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.<\/p><\/blockquote>\n

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.<\/p>\n

And it's to increase for purely financial reasons. Most importantly\u00a0inflation is not going to be covered. I should be explicit about what this means when uncoded.<\/p>\n

The\u00a0unanticipated\u00a0inflation is the result of an increase in VAT. Unlike most businesses hospitals pay VAT, and quite a lot of it,\u00a0because\u00a0what they supply is VAT exempt but what they buy still has in many cases (including on agency staff) VAT charged on it.<\/p>\n

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,\u00a0significantly, to the\u00a0point\u00a0of reducing hospitals to a state that experts predict will be chaotic .<\/p>\n

Blame the Tories when people die as a result, as they will. There's no one else at fault.<\/p>\n","protected":false},"excerpt":{"rendered":"

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
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