Healthcare          

27/06/17

The health sector was a prominent focus of campaigning ahead of the referendum polling day, with both sides making claims about how a decision to leave the EU or remain would impact on the delivery of services, waiting times and funding allocations. The nation has now backed Brexit, and it’s likely this decision will create a series of short and long-term impacts in the NHS.

In the short term, the impact of Brexit on the sterling exchange rate, and therefore the cost of services from overseas, could have consequences on the costs of procuring medical equipment and drugs, as well as affect the delivery of capital projects. Making sure contracts are tied down will be important as exchange rates stabilise.

The NHS has had a challenging time in recent years as demand has increased against a backdrop of capped public funding. It is not yet clear how public sector budgets may be allocated in the future - these decisions are largely politically influenced and a new Prime Minister (and Cabinet) may hold a different view of the NHS and where it stands in the pecking order. 

The Leave campaign argued that cutting payments to the EU would create extra funding for the NHS in the order of £100m per week. Even if this pledge holds true, it won’t happen quickly as the UK is tied into making central payments to the EU until it completely withdraws. Under Article 50 of the Lisbon Treaty, this process must take at least two years.

The health sector is already facing a difficult time, but it is likely the Brexit outcome will add more uncertainty and challenges overall. Given the current problems faced recruiting and retaining staff, it’s hard to imagine that recruiting overseas staff will get any easier. Existing staff may also decide its best to cash in on any retirement opportunities while they can.

Building a strong financial base that can weather the EU storm must be a key focus going forward.

Overall, the health sector can expect more change, more challenge and more uncertainty. In the NHS, this could be a description of business as usual – the service is constantly changing and challenging how it does things. In fact, you could argue that the NHS eats change for breakfast, though this time the breakfast may be a little less continental.

Please contact Steve Uttley associate director in RSM’s public sector consulting team if you would like any advice on these issues.