Long stories short
- China said it would reopen its borders to foreign tourists for the first time in three years.
- Trump’s former lawyer testified to a grand jury investigating a payment he negotiated from the former president to porn star Stormy Daniels.
- Paralympian and the UK’s longest serving female peer Baroness Masham died aged 87.
NHS receipts
Jeremy Hunt will tomorrow unveil his first budget as the UK’s Chancellor. He will do so as over 30,000 junior doctors are striking, more than 7.2 million people are on the waiting list for elective care and there are over 120,000 NHS staff vacancies.
So what? Hunt is expected to announce measures in the budget to limit household energy bills, boost tax-free pension contributions and help families on universal credit with childcare costs. But he’s not expected to announce extra funding for a healthcare system on its knees.
In his autumn statement last November, Hunt increased the NHS budget by £3.3 billion for each of the next two years and announced more funding for social care. Health policy experts warned at the time that it only covered about half of what was needed.
Here are three key numbers to help make sense of what’s going on – and wrong – with the NHS:
1. 6,950 – the number of UK doctors who applied to work abroad last year, up 25 per cent on 2021. A quarter of those who applied went to work in Australia.
Why leave? In the latest NHS staff survey, 26.4 per cent of 600,000 respondents said they had enough staff where they work to be able to do their job properly – 11.9 per cent fewer than in 2020. Some are leaving the country; others are moving into retail or hospitality.
The NHS Confederation wrote a letter to Hunt over the weekend calling on the government to commit to publishing – and funding – a long-awaited workforce plan that forecasts the NHS workforce required over five, ten and 15-year periods, or face a health system “stuck in perpetual crisis management”.
Holly, a 26 year-old radiographer, told Tortoise she had moved into private care because “It’s just unsustainable [in the NHS]… and it’s better money”.
2. 35 – per cent, the pay increase requested by junior doctors based on an estimated 26 per cent real terms pay cut over the past 15 years.
The 26 per cent figure is based on the retail price index (RPI) – no longer used by the Office for National Statistics as it can overstate inflation. Using the consumer price index, the figure is more like 16 per cent. The most recent independent pay review offer for health workers was 3.5 per cent.
Ben Zaranko, senior research economist at the Institute for Fiscal Studies, said it was “difficult to see how [the Department for Health] could offer substantially above what’s been budgeted for without extra cash”. His expectation for tomorrow: “there won’t be any”.
A junior doctor working in A&E said: “We are just so fed up… [there is] no recognition of the amount of work and overtime and sacrifice that so many people within the healthcare workforce have made.”
3. £2 billion – the potential hole in the NHS capital budget by 2027.
The capital budget, or spending on infrastructure, is forecast to grow from £11.2 billion in 2022-23 to around £12.6 billion in 2024-25. That won’t cover the 40 new hospitals pledged in Boris Johnson’s 2019 manifesto as inflation – particularly the cost of building materials – bites into ring-fenced cash.
Building and repairing hospitals isn’t the only infrastructure investment needed to effectively run a health service – digital transformation is also needed. But as ceilings crumble, it’s a start.
Back to tomorrow. Hunt has £30 billion of wiggle-room from high tax receipts and falling energy prices from which he could fund short-term financial fixes such as one-off cost-of-living payments.
But sticking plasters are temporary for a reason. Zaranko says the long-term economic outlook is still “fairly bleak”, making permanent increases in public spending unlikely.
Must read: Camilla Cavendish’s FT piece on her 20-year journey through the NHS, in which she argues for 10-year funding plans rather than annual budgeting.
CAPITAL ECONOMY, BUSINESS AND FINANCE
Banks hold breath
Here’s a number to conjure with as bank stocks swoon and regulators from Washington to Tokyo hope they’ve done enough to prevent contagion spreading from the failure of two big US banks in the past four days: $600 billion. That is the sum of paper losses incurred by US banks as a result of interest rate rises announced to tame inflation. As rates rise, so do bond yields. Bond prices fall as yields rise, forcing banks to sell bonds at a loss if depositors withdraw so much of their money that ready cash reserves are exhausted. As of 10am London time today, Silicon Valley Bank and Signature Bank remain the only ones closed by regulators in the current crisis, but Moody’s, the ratings agency, has put five more banks on review for a potential downgrade. Bank stocks fell steeply in Japan, where Softbank has lost 7 per cent of its value since the SVB debacle, but less steeply in Europe. Maybe there are consolations for the world’s tech laggards.
TECHNOLOGY AI, SCIENCE AND NEW THING
Gig is up
Three years ago Uber and Lyft spent nearly $200 million on lobbying and campaigning in California alone to preserve their ability to treat drivers as contractors rather than workers. The investment is paying off. It helped a state proposition in favour of contractor status to pass in 2020, and an appeals court has now thrown out a challenge that alleged the proposition violated California’s constitution. So Uber and Lyft can stick with a business model that pays drivers strictly according to fares earned, and which is exempt from state laws on minimum wage, overtime and workers’ compensation. The two companies pressured drivers to support the 2020 proposition, and many did. In the UK, where Uber faces a driver shortage, the company has announced a pilot scheme to offer ten hours of free childcare a week to 1,000 drivers.
The 100-year life health, education AND GOVERNMENT
Drug deal gone wrong
In February last year a settlement was reached in the US regulating the distribution of potentially addictive painkillers in the wake of the opioid crisis. But it’s resulted in a knock-on effect on patients in need of legitimate prescriptions, the New York Times reports. Pharmacies’ ability to stock and dispense drugs known as “controlled substances” has been restricted by the settlement, with the amount a pharmacy can sell a month being capped by an algorithm. It’s not limited to opioids – medication which has the potential to be habit-forming is also being heavily scrutinised, including drugs like Xanax (used to treat conditions like anxiety and panic disorders) and Adderall (for ADHD), resulting in some prescriptions being cancelled.
Our planet CLIMATE AND geopolitics
Aukus pact
With a 377-foot submarine – the USS Missouri – in the background, the leaders of the US, UK and Australia yesterday announced new details of their Aukus defence pact at a US naval base in San Diego. Australia will buy between three and five of America’s Virginia-class nuclear-powered submarines from 2032, while British firms BAE Systems and Rolls-Royce will help build a new submarine dubbed the SNN Aukus, which will be ready in the late 2030s. The cost to Australia: A$368 billion ($245 billion) by 2055. But with eyes fixed on China’s growing ambitions in the Indo-Pacific, it’s an investment “we cannot afford not to make,” says Australia’s defence minister. They just have to hope China doesn’t move quickly.
CULTURE soCIETY, IDENTITY AND BELONGING
Israel’s protests
On Saturday, 500,000 people across Israel rallied against Prime Minister Benjamin Netanyahu’s plans to curb the power of the judiciary and give the government control over appointing judges. Israel’s president has spoken out against the proposals; its chief economist says they will damage economic growth. Israel’s military reservists have now joined the chorus of opposition – last week 37 of the 40 reservists in Squadron 69, an elite Israeli air force unit, told their commanding officer they would not turn up for a training day. So far Netanyahu is not backing down – but the disquiet among reservists, a key institution in Israeli life, is the most significant challenge yet. “If anything is going to cause a change of plan, it will be this,” a former IDF intelligence official told the FT.
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Phoebe Davis
@phoebe_ivy
Additional reporting by Giles Whittell, James Wilson and Jess Winch
Photographs Getty Images
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