How the 2021 Budget Will Impact Both the NHS and the Healthcare Sector

The 2021 Budget Impact on the NHS and the Wider Healthcare Sector


Budget Priorities

The government announced the budget spending plan this Autumn (2021) totalling £176.5bn, showing a 27% increase compared to the 2010 budget. There is much debate about what the budget should be spent on, with the NHS in England set to receive £5.9bn. Government officials are striving to prioritise reducing the healthcare sector backlog on elective waiting lists which have significantly increased during the pandemic. Additional funding for ongoing vaccinations and COVID-19 treatment, as well as diagnostic technology investments, are also being made.


Patient Flow and Reducing Backlog 

The main priority as a result of record-high waiting lists is using the budget for reducing the severe backlog of patient care. Using this fund, the NHS is expected to clear the pile-up and provide 30% more elective activity by 2025. Chancellor Rishi Sunak voiced plans to build 40 new hospitals, over 100 community diagnostic centres, as well growing the workforce by 50,000 nurses. A further £1.5bn will be spent on extra hospital beds and surgical hubs to accomplish increasing capacity, dealing with the challenges head-on. This will prove necessary to increase the capacity current healthcare facilities do not have, and ultimately improve patient flow from diagnosis to discharge.

However, the accumulation of patient waiting lists has risen to 5.6 million pathways in 2021 from 2.9 million pathways in 2015. The Health Foundation estimated it would cost as much as £16.8bn to just eliminate waiting lists for routine elective care. Therefore, the budget plan to address this backlog may not be sufficient enough to tackle the current capacity crisis. In addition, with the average age and population increasing, further capacity is required.


Diagnostic Technology Investments

Sunak confirmed funding for IT and digital health technology upgrades, with investment in new equipment such as MRIs and CT machines. £2.1bn of the budget is dedicated to these technological investments, resulting in a ‘digital ecosystem’ to give patients a more direct route to care. Half of UK adults who visited the emergency unit in the last 12 months;

  • Did not require urgent A&E treatment.
  • 24 percent were told to visit another health professional.
  • 13 percent were sent to their GP.
  • 11 percent were sent to a pharmacist.


Through the investment of these assistive technologies, the early signs of potentially critical conditions can be spotted, allowing patients’ needs to be met at the beginning of their healthcare pathway, fast-tracking them to the right clinician and point of care.

On the other hand, the Healthcare Executive Advisor at Intersystem, David Hancock, states there is a bigger need to focus on “improving productivity and patient safety” rather than diagnostics and imaging. The NHS already faces huge economic pressures regarding the cost of their workforce, as well as in materials and supplies. Increasing the budget for technical advancements means more staff will be needed to handle this equipment, further provoking economic pressures and capacity challenges.


The Impact of the Pandemic

COVID-19 is a central component to the increase of waiting lists. With the pandemic evoking major NHS difficulties, an extra £1.65bn was dedicated to support the continued rollout of the COVID-19 vaccination programme in March 2021. The Chief Executive of the Nuffield Truth think tank, Nigel Edwards, said “recovery from the pandemic will take several years, not only for the economy, but for the NHS to work through waiting lists, boost capacity, and adjust to the ongoing demands of COVID-19 on the health service.” He claimed economic funding is vital for the coming years, as well as the honesty that patients will end up waiting longer until the crisis is reduced.

Similarly, the British Medical Association Council Chair, Chaand Nagpaul, conveys that although levels of infection may be slowly reducing, the NHS remains under more strain than any other time in recent history. This funding proves to be a necessity for reducing COVID-19 related concerns such as prevention methods (vaccinations), and the evident backlog it has caused. Although this budget plan puts the backlog crisis at the forefront of priorities, it is thought widely that not enough is being done to support the NHS under these pressured circumstances. Support from the government must surge if patient care is to be improved.

Overall, the key issues addressed in the Budget 2021 are reducing the elective backlog, additional COVID-19 funding, and the investment in diagnostic technology. These all aim to tackle the capacity crisis faced as a result of the increasing number of patients in need of care. The overall amount to achieve improvement within the NHS is believed to cost more than £20bn over the next 20 years, with uncertainty as to where this funding will come from. Despite this, the government is acknowledging these pressures which is the first step in solving them.

Written by Georgie Shirlaw, Bid Writer 

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