Unravelling the Budget – Health and Life Sciences reflections

Alongside the economy, health is one of the top concerns among the electorate. In today’s Budget, likely to be the last before the General Election, the Chancellor made announcements which will have implications for the healthcare system and clients alike. 

Here, we take a look at three key take aways for the health and life sciences industry:

An efficiency saving trade-off for the NHS 

The Chancellor’s flagship Budget announcements were largely based on personal finances. This includes a 2p cut to national insurance tax, freezing fuel duty, and raising the child benefit cap. Despite this, Hunt did find room for one significant financial package for the NHS – £3.4 billion of funding towards the NHS Productivity Plan.  

The Productivity Plan aims to fund digital advancements across the board, including for AI MRI scanners, ungraded IT systems and digitally enabled prevention services. The plan will also fund electronic patient records in all NHS trusts by 2026 – something initially committed to by Hunt when he was Health Secretary in 2013.  

This funding package and the commitments attached to it should be welcomed; however, they will be delivered alongside an expectation that the NHS achieves annual productivity growth of 2%. In the wake of ongoing industrial action and the largest real terms cut to NHS funding since the 1970s, this may be difficult to achieve.  

Clients engaging with the NHS should bear this in mind – policies and proposals that offer productivity gains or efficiency savings will be warmly welcomed.  

Scuppering Labour 

Hunt’s unexpected decision to reform the non-dom tax status takes away the only funding source for Labour’s health service reform plans, just as they will have finalised their manifesto commitments.  

Shadow Health Secretary Wes Streeting confirmed yesterday that this leaves a hole in their funding allocation, and they would have to look at alternatives. Hunt’s decision to act here puts a sizeable spanner in the works for Labour’s health mission.  

While there is nothing to suggest that Labour are inclined to move in an entirely new direction, this new development will likely require them to consider their priorities and rethink their direction of travel in health policy.  

What about Life Sciences?  

Hunt’s budget this year reaffirmed the Government’s position placing Life Sciences as a key growth sector in a series of announcements including funding for medical research charities and R&D tax reliefs. He hailed the success of AstraZeneca’s £650m investment in R&D and manufacturing sites in Cambridge and Liverpool respectively. 

Richard Torbett, CEO of the ABPI, suggested that this shows UK medicine manufacturing can be reinvigorated if the policy environment is right. The policy environment he refers to is one that values growth, jobs and investment.  

This is a mindset shared with Labour. Attracting Life Sciences industry investment is central to their plan for the sector and wider ambitions for growth. Any opportunity to leverage home-grown domestic growth and inward investment will be looked on favourably.