Chancellor Philip Hammond will set aside £60bn in preparation for a Brexit crisis in tomorrow’s Budget, but will not spend any extra cash to alleviate the meltdown of the UK’s health services.
Signalling that the Tories’ austerity drive on public services will continue, Hammond said his priority is directing funds to help mitigate any economic repercussions of leaving the EU.
The government has ignored warnings over its “high risk” Brexit strategy from within it’s own party, as well as from the opposition, industry leaders and Unite, and is set to take an aggressive stance during the negotiations.
Theresa May has vowed to leave the EU single market and customs union and is refusing to guarantee the rights of European citizens living in the UK. The Prime Minister has also threatened to lower corporation tax to poach big business from the continent if a satisfactory trade deal with the EU is not reached.
Responding to the news of Hammond’s £60bn Brexit crisis fund, shadow chancellor, John McDonnell, said the NHS and social care “crisis is here now” and called for some of the £60bn to be spent solving it.
Despite reports that Hammond is preparing to allocate token funding for social care, Unite warned that the system needs additional new money from the Chancellor to avoid cuts to other local authority services.
Unite national officer for local government, Fiona Farmer, said, “What we need is genuine new money; we don’t want a futile ‘robbing Peter to pay Paul’ scenario, with other vital budgets being raided by a light-fingered chancellor seeking to assuage mounting public concern.”
However, the Chancellor has said that any fresh funding would remain off-limits, despite a recent rise in tax revenues, for nearly everything except Brexit.
He told the BBC, “If your bank increases your overdraft limit you don’t want to go and spend every penny in it.
“I regard my job as Chancellor as making sure that our economy is resilient, that we’ve got reserves in the tank so as we embark on the journey that we’ll be taking over the next couple of years we are confident that we’ve got enough gas in the tank to see us through that journey.”
Hammond dismissed providing extra funds for “under pressure” services and insisted that the problems facing the NHS and social care would not be solved by money alone.
Case for social care funding
He said, “There is a case for taking a longer term view to fund a service that is linked to the ageing demographic of the population.”
However, shadow Chancellor, John McDonnell, told the BBC that the crisis in the NHS and social care was too big to be ignored.
He said: “The independent estimate now on (spending needed for the) NHS and social care is between £8bn and £12bn.
“We believe that the government now put aside, as is reported, £60bn – increased tax receipts have contributed to this as well – for a crisis in case of Brexit.
“The crisis is here now. We should prepare for Brexit but some of that money now needs to deal with the crisis in the NHS and social care.”
Unite also drew attention to crippling local authority cuts, warning that an injection of fresh money into the social care system was the only way to avoid other council budgets being slashed.
There is an estimated £2.6bn shortfall in local authority social care provision, however stripped to the bone councils have no extra resources to plug the gaps.
Since 2010, local government has faced the brunt of the cuts to public spending with 37 per cent cut from the local government budget between 2010 and 2015, with a further 56 per cent due to be axed by 2019/20. Along with Unite, the Local Government Association, the King’s Fund, Nuffield Trust and the Association of Directors of Adult Social Services have all called for the more than £1 billion needed to fund adult social care next year alone.
Unite national officer Fiona Farmer said, “Local government, which now also has the added responsibility for ‘public health’, is faced with a growing population of the elderly and the vulnerable, yet the pot of money in real terms is rapidly diminishing.
“If the social care funding crisis is not addressed urgently, cash will be diverted from such important services as libraries, roads, youth services and parks putting a further strain on those services that local communities rely on every day.”
She added, “Britain is the world’s sixth largest economy and it is incumbent on the Chancellor to find the necessary cash for local government, so that those in need of social care can live in comfort and dignity.”