23.Local authorities are currently allocated a ringfenced public health grant. Public health accounts for some 4% of local authorities’ total spending. There are six ‘prescribed’ or mandated public health functions—services that local authorities are obliged to provide with their public health grant. In July 2015 public health budgets were subject to an in-year cut of £200m (6.7%), and the 2015 Spending Review announced further cuts to the public health budget.
24.The graph below has been adjusted to include the funding for 0–5 services which prior to 2015–16 was allocated to NHS England. It shows the reality of a sharp drop from 2014–15:
25.The cuts are likely to be “significantly front-loaded”, according to the Health Foundation. Real terms reductions in the first four years from 2015–16 (-3.8%, -4.2%, -4.4%, -4.6%) are followed by a lower reduction in 2020–21 of -2.2%. This amounts to a real terms reduction from £3.47bn in 2015–16 to just under £3bn in 2020–21.
26.Funding allocations for public health activities were originally determined by a baseline audit of spending against public health activities by primary care trusts. There was wide variation in this historic expenditure across the country, ranging from £18 per head in Surrey to £108 per head in Westminster with an England average of £47 per head. This resulted in inequality of funding, as funding was matched to past spending, not need. A resource allocation formula has been devised to match funding more closely to deprivation and need. This formula suggests that Slough was receiving 48% under target, and Kensington and Chelsea was receiving 199% over target. The growth funding in the allocations in 2013/14 and 2014/15 was applied differentially with the aim of bringing councils closer to their target allocation. The most over-target areas received 2.8% growth in each of the years while the most under-target areas received 10% in each year. However, this reallocation has only resulted in small reductions to variations, and funding cuts have been made on an equal basis without reference to target allocations.
27.Funding sources for public health are likely to change significantly in coming years. In 2018–19 the ringfence will be removed, and central government grants to local authorities will be replaced by funding through retained business rates.
Note: Health expenditure is measured as a total department expenditure limit, excluding depreciation. Sources: HM Treasury, Public Expenditure Statistical Analyses 2015. DCLG, Local authority revenue expenditure and financing England: individual local authority data – outturn. NAO report: , Figure 1, p.12
28.Our witnesses had mixed views on whether the removal of the ringfence was a positive or a negative development. There was concern that the formula for adjusting retained business rates should be carefully designed so as not to further disadvantage poor areas and compound health inequalities.
29.Some witnesses argued that working within more straitened financial circumstances had the potential to prompt local authorities to be more creative about unlocking resources in other local authority services to achieve public health goals:
30.In oral evidence to us, PHE took a pragmatic view that the system would work with the resources it has:
31.However, NHS England’s response in a recent Board Paper clearly illustrate the potential for public health cuts to derail the delivery of the Five Year Forward View:
[…] the Forward View called for a radical upgrade in prevention, and support for wider public health measures. Given the funding pressures in the local authority financed public health services and the need for wider government action on obesity and related challenges, we cannot yet conclude that this test has been met. Much hinges on whether the Government’s proposed childhood obesity strategy [which has yet to be published] comprises an effective package of credible actions […] Absent this, and other linked action, the NHS will be exposed to patient demand and consequent funding pressures over and above that modelled in the Five Year Forward View assumptions.
32.Unsurprisingly, our witnesses from local authorities and public health services echoed these concerns, describing the cuts as ‘galling’, and as sending out a very unhelpful message that seemed to run counter to government policy:
33.Witnesses also explained to us that prevention is the first thing to get squeezed, but that this is a false economy.
34.A Director of Public Health explained that because returns on public health preventative investment are often seen as very long term, this makes them particularly vulnerable to cuts:
35.Simon Stevens, Chief Executive of NHS England, also emphasised the importance of protecting preventative services to ease pressure on and save money in more expensive parts of the NHS:
36.Witnesses from a wide range of different public health services and professional backgrounds also gave examples of the immediate impact of cuts on their services at our informal roundtable session:
37.A survey commissioned by the ADPH shows that local authorities are planning cuts across a wide range of public health services both in 2015–16 and 2016–17:
Source - ADPH; 2015–16
Source - ADPH; 2016–17
38.As we concluded in our recent report on the Spending Review, cuts to public health funding are a false economy and jeopardise the delivery of the demand and efficiency savings essential to a sustainable NHS outlined in the Five Year Forward View.
39.Local authorities have managed to make some savings by recommissioning services, but they are at the limit of the savings they can make without adversely affecting the provision of services. Preventative services are likely to be particularly affected including those investments which support long term health and wellbeing.
40.Cuts to public health are a false economy. The Government must commit to protecting funding for public health. Not to do so will have negative consequences for current and future generations and risks widening health inequalities. Further cuts to public health will also threaten the future sustainability of NHS services if we fail to manage demand from preventable ill health.
41.We recommend that the Government sets out how changes to local government funding and the removal of ring fencing can be managed so as not to further disadvantage areas with high deprivation and poor health outcomes. We plan to return to review the variation in funding and outcomes.
11 Health Foundation p1
12 Calculations made by the House of Commons Scrutiny Unit.
13 Department of Health,
16 Supplementary evidence from NHS England , Chapter 4
17 ADPH, , February 2016
30 August 2016