25 March 2022

Chancellor’s 2022 Spring Statement – what does it mean for NCHA members?

This week Chancellor Rishi Sunak delivered the 2022 Spring Statement, against a backdrop of high inflation and economic uncertainty because of the impacts of Covid and the war in Ukraine.

For members the key points to note are:

• The Office for Budget Responsibility (OBR) has said "there is unusually high uncertainty around the outlook", but that unemployment is still forecast to be lower. Inflation, however, is expected to average 7.4% this year
• Business rates discount of 50% (up to £110,000) will take effect from April for retail businesses. This includes chemists, opticians etc and should therefore also apply to audiology practices based in similar settings - see Part 2(i) here.
• From April, the Employment Allowance will increase by £1,000 to £5,000
• The health and care levy stays, so National Insurance (NI) contributions will increase for employers and employees as planned.
• The NI threshold for individuals will increase by £3,000 to the level of the tax threshold of £12,570. That means people earning up to £12,570 will not pay tax or NI
• Fuel duty has been cut by 5 pence per litre
• If you have patients or other colleagues struggling with energy bills, local authorities will have additional funding for the Household Support Fund to help those struggling the most. Find your local council

In the detail, the government has also announced it will double the NHS efficiency target from 1.1% to 2.2% a year. It said this would "free up £4.75 billion to fund NHS priority areas over the next three years" and ensure that "the extra funding raised by the Health and Social Care Levy is well spent".

The Health Service Journal (HSJ) has also reported that NHS England (NHSE) has been told to cut "core funding" by £500m in 2022/23. NHSE Chief Financial Officer Julian Kelly says this would most likely involve "slowing down" some transformation programmes and ambitions from the NHS long-term plan. The HSJ also cites the Institute for Fiscal Studies (IFS) saying that "the NHS England budget would now grow by 3.6% in real terms over the next three years, down from 4.1% under previous forecasts".