Healthcare Industry Responds to Rachel Reeves’ Budget
The UK’s Labour government took power back from 14 years of Conservative rule in July 2024. In its new Budget, Labour Chancellor Rachel Reeves has announced that she will ‘repair public finances and restore economic stability’.
The Chancellor has confirmed an additional £22.6bn (US$28bn) for day-to-day spending over two years for the Department of Health and Social care, supporting the NHS to provide 40,000 elective appointments each week and reduce waiting times in the NHS.
Here’s what leaders from the healthcare sector said about the Budget:
Transforming public sector care with AI
Darren Rushworth, President of NICE International, believes that AI-driven solutions provide a range of immediate benefits through streamlining operations, such as personalised communications and administrative tasks, letting professionals focus on what truly matters.
“Following the autumn budget announcement, it is critical to recognise that AI has the power to revolutionise public sector efficiency, empowering critical services like the NHS to deliver exceptional care in-person and digitally,” he said. “In line with the government’s commitment to enhancing service delivery and driving cost-saving, fully embracing automation can help public sector organisations streamline operational workflows, remove burdensome administrative tasks, and achieve significant efficiency savings quickly.”
Darren argues that this frees up those responsible for offering care to focus on what truly matters – delivering empathic experiences that can change lives. It can also support public sector organisations to communicate with citizens in their preferred digital channels and adopt innovative AI agents.
“This week, frontline services, including HMRC, will see a rise in inbound contact volumes, leading to additional strain on the contact centre and frustration among UK citizens. In these scenarios, accuracy, efficiency and empathy are vital to any positive interaction,” he continued. “While this increased demand undoubtedly raises serious concerns, it also highlights the potential of AI to empower a new era of citizen service.”
By investing in automation across every service touchpoint, these public services could streamline workflows, equip agents with real-time insights and provide smart self-service options for the appropriate citizen enquiries.
Browne Jacobson’s Carly Caton on revenue growth for the NHS
Carly Caton, Partner specialising in commercial healthcare at UK and Ireland law firm Browne Jacobson said that any new funding that helps to add capacity will be welcomed within the NHS, but to prevent this just being a sticking plaster, identifying new avenues to generate additional revenue for trusts and their NHS patients is vital.
“The government should actively encourage trusts, backed by funded support programmes, to develop a commercial mindset and explore how to maximise their available resources, while simultaneously improving healthcare services for the general public,” she said.
Caton believes that Increasing private patient activity within NHS hospitals is one of the easiest routes to achieving this, as most trusts already do this with private patient units. Yet these tend to be small, meaning they provide untapped potential in terms of raising additional income to plough back into NHS services.
“There are numerous ways of expanding these units and it doesn’t necessarily require significant capital investment if a trust is willing to partner with a private provider,” she continued. “Partnership structures can extend from commercial agreements to developing some form of physical expansion to estates and all whilst creating new income streams for NHS patients at no cost to the taxpayer.
“Many of our decision-makers are all too keen to shout from the rooftops about the NHS being broken but this isn’t necessarily the case – it boasts world-leading assets and expertise that, if harnessed correctly, provide ample opportunities for healthcare to help drive economic growth as opposed to hampering it.”
BHTA's David Stockdale urges VAT removal on defibrillators
David Stockdale, CEO of the British Healthcare Trades Association (BHTA), said that he found it deeply disappointing that the Chancellor has chosen not to remove VAT on all defibrillator purchases.
“Today’s budget includes tens of billions in tax increases and spending commitments, yet cutting VAT on defibrillators would have been a minimal cost for the Treasury. Just last week, our campaign’s Ambassador, Jack Hurley, along with a range of supporters, took our concerns to Parliament and No. 10. Over 65 MPs—nearly 10% of Parliament—backed our call to remove VAT from all defibrillator purchases.”
David and his team will continue pushing for this vital change.
“Removing VAT on these devices is the right thing to do, and we’re committed to advocating for this change until it’s achieved."
The benefits of tax deductible healthcare costs
However, Chancellor Rachel Reeves did announce an extra £600m in funding to support local authorities providing care.
“While the Chancellor’s allocation of £600m to support local authorities with social care is welcome, it feels like a duct-tape solution to a much bigger, systemic problem,” shared Jody O’Neill, CEO & Co-founder, Curam. “The cracks in the social care system run deep, yet the government continues to shy away from a desperately needed reform.”
Jody added that one move that would provide immediate relief to families across the UK is the introduction of tax-deductible care costs.
“Only the very poorest members of society receive support on social care payments at present and the prospect of a spending cap has been taken off the table. Many families are struggling to provide essential care due to the sheer cost. Meanwhile, countries such as the USA and Germany have more advanced systems that remove tax burdens and make care more accessible,” he continued. “Tax deductible care costs are as pragmatic as they are compassionate. By making quality care more financially accessible, we boost the overall wellbeing of the nation. Affordable at-home care shortens hospital stays and reduces unnecessary admissions which reduces strain on the NHS, something that is quite rightly a top priority according to the government.”
Jody suggested that without meaningful measures which improve social care provision, talk of reforming the NHS remains empty words.
“We need to move on from patchwork solutions and invest in a healthier society,” he added.
Greater autonomy, improved pay and specialist training opportunities for healthcare workers
According to Ashley-Louise Lumley, Care Champion and Care Professional at Curam, retention and recruitment problems within the UK’s archaic care system lie at the heart of our social care issues.
“Each year, we lose skilled Care Professionals to burnout, low pay and limited career progression and as a result, vulnerable people lose access to essential support,” she said. “Extra funding for local councils must be used to explore more tech-driven systems that empower Care Professionals with the flexibility to decide where, when and how they work.”
With greater autonomy, improved pay and specialist training opportunities, she believes that Care Professionals will experience higher job satisfaction which will lead to better care and a more stable workforce, which is essential for Labour to deliver its National Care Service vision from its manifesto.
“Investing in Care Professionals and a community-based service allows people to live independently for longer with local support networks,” she said. “This has a positive ripple effect throughout the healthcare system as hospital admissions and discharge delays are reduced. Prioritising this will finally create a society where Care Professionals are valued, and everyone who needs support receives outstanding care.”
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