Analysis from the House of Commons library shows that the NHS will suffer £2.7bn in new cuts over the course of this Parliamentary term due to a shocking government miscalculation which underestimated the pension costs of all public sector workers by as much as £4bn a year.
The Government has offered to cover additional costs for departments for just one year, leaving the NHS to find two years worth of additional pension costs totaling £2.7bn before the next election.
That’s the equivalent of 61,912 nurses salaries at Band 5 on the NHS’s pay scale.
This is now the second time that the Government has asked departments to make cuts to cover a mistake in pension calculations.
This latest round comes in addition to nearly £4bn of cuts that government departments were forced to make in the 2016 Budget, when the government made the same mistake.
The initial announcement was snuck out in a statement late on Thursday 6th September when Parliament wasn’t sitting, meaning that billions of pounds in further austerity measures have not received parliamentary scrutiny.
In the written statement The Chief Secretary to the Treasury, MP Elizabeth Truss, dropped the bombshell that the NHS would be facing more cuts by saying:
“Early indications are that the amount employers pay towards the schemes will need to increase. This is because of proposed changes to the discount rate, which is used to assess the current cost of future payments from the schemes, to reflect the Office for Budget Responsibility’s long-term growth forecasts.
Further details will be known later this year. Some increase in costs was anticipated at Budget 16, which departments and the devolved administrations will need to meet in full.
Treasury will be supporting departments with any unforeseen costs for 2019/20. Further discussions will be taken forward as part of the Spending Review.”
Peter Dowd MP, Labour’s Shadow Chief Secretary to the Treasury, commented on the new House of Commons library analysis, saying:
“Billions of pounds are being quietly cut from our NHS, due to a poisonous cocktail of disastrous economic mismanagement and spiteful behaviour.
“These cuts are the equivalent of paying the salary of over 61,000 nurses a year. Nurses whom we desperately need after 8 years of crushing austerity in our NHS.
The Chancellor must immediately own up and commit to meeting these extra costs, not just push them on to slashed and struggling public services. All this just goes to show, you cannot trust the Tories with our NHS.”
This revelation could not have come at a more awkward time for Theresa May with The Conservative Party Conference starting in Birmingham today. With her party already on the back foot over in-fighting and Brexit, this will just pile on pressure on an already weak May.
