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Javid gives £210m to nurses despite Brexit spending spree warning

Tom Belger
Finance and policy reporter
Chancellor Sajid Javid. Photo: PA

Chancellor Sajid Javid on Tuesday pledged a further £210m to help train and retain NHS nurses, adding to the growing list of spending commitments already made by the government.

The commitment comes despite warnings from a leading think tank that a no-deal Brexit could “blow a hole” in UK finances and force the chancellor to find billions in extra cash to meet spending promises.

The Treasury announced new funding for nurses on Tuesday, ahead of the chancellor’s full spending review announcement on Wednesday. Nurses, midwifes, and allied health professionals will be given a £1,000 “personal development” budget to pay for in-career training.

“Our nurses, midwives and other dedicated NHS professionals care for us when we need it most, so it’s right that we support them to develop rewarding and fulfilling careers, and continue to deliver the highest standards of care for patients,” Javid said in a statement.

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The boost to nursing funding comes amid an acute staffing shortage that has been described as “the biggest single challenge” facing the NHS.

Health secretary Matt Hancock said: “We must start by looking after the nurses, midwives, and other dedicated health professionals we have already got, so they choose to stay and pursue a lifelong career within our brilliant NHS.”

The funding for nursing forms part of a recent multi-billion pound spending spree by the chancellor that is widely seen as laying the ground for a general election manifesto.

Prime minister Boris Johnson has pledged to upgrade 20 hospitals, ramp up no-deal planning and recruit 20,000 more police officers, among other promises.

The Institute for Fiscal Studies said this week that the pledges mean government spending could be between £4bn and £5bn higher than already budgeted if cuts are not made in other areas.

READ MORE: What to expect from chancellor Sajid Javid’s 2019 spending round

Borrowing has dropped as spending has been slashed since the financial crisis. Chart: IFS / ONS Public Finances Databank

The IFS also warned that the budget deficit could rise further if the UK falls out of the EU without a deal.

A no-deal Brexit could “blow a hole” in the public finances, the think tank said, citing official forecasts predicting Britain could slide into recession in a no-deal scenario. This would damage tax receipts and force the government to borrow, raise taxes, or cut spending.

Changes to how student loans are recorded in government accounts will also drastically shrink the so-called “headroom” officials can spend without breaching the government’s own strict spending rules.

The chancellor has £15bn of “headroom” available under the most recent forecasts. His predecessor Philip Hammond left the headroom untouched, in case it shrank or had to be used to help reflate the economy after Brexit.

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The IFS said the next official forecasts “are likely to reflect a deterioration in the near-term outlook for the economy and public finances.”

“That £15 billion of apparent headroom may turn out to be more illusion than reality,” the IFS said in a report published on Tuesday.

“Given that, one might have expected the new Prime Minister and Chancellor to exercise some caution in announcing expensive tax cuts and making difficult-to-reverse spending commitments before the uncertainty is resolved.”

Javid will announce the conclusions of the government’s 2019 spending round on Wednesday, setting budgets for one year for departments and the devolved administrations.