Questions Raised About the Government's NHS Spending Boost

Peter Russell

June 18, 2018

The NHS in England will be asked to develop a 10-year plan to ensure that promised extra funding will be used effectively, Theresa May has said.

The Prime Minister announced that by 2023-24 an extra £20.5 billion a year would be available for the health service over and above the rate of inflation.

Additional funding would also be made available for the devolved administrations in Scotland, Wales, and Northern Ireland.

Mrs May said some of the money would come from a so-called 'Brexit dividend'. In a speech at London's Royal Free Hospital this afternoon, Mrs May said: "Some of the extra funding I'm promising today will come from using the money we will no longer spend on our annual membership subscription to the European Union after we have left."

Questions though have been asked about how much will have to be sourced additionally to pay for the cash boost. This morning, the Health Secretary, Jeremy Hunt, conceded in a BBC interview that there would be "an increased burden of taxation". Mrs May confirmed that "across the nation, taxpayers would have to contribute a bit more in a fair and balanced way to support the NHS we all use". However, she did not elaborate on what a bit more meant or how extra taxes would be levied. Further details would be set out by the Chancellor of the Exchequer in a budget, she said.

Mrs May said that the extra money would pay for more doctors and nurses and would be directed at improving performance issues in the health service, including cancer care and mental health.

Spending the Money Wisely

Mrs May said that the NHS would need to come up with a long-term plan. In a television interview on Sunday, she said: "We need to make sure that money is spent wisely, that it isn't wasted, that it isn't just used up on bureaucracy".

Health spending has risen by an average of 3.7% over the rate of inflation since the NHS was founded 70 years ago.

The funding boost announced this week is expected to average 3.4% across the 5-year period. This is slightly more than the 3.3% over 15 years that the Institute for Fiscal Studies has said the NHS needs just to maintain services at current levels. However, it is significantly less than the 4% a year in the medium term and the 5% in the short-term that the think-tank said was needed to improve services.
 

The Growing Cost of Healthcare

The promise of extra cash has been broadly welcomed by the health service. However, the NHS Confederation, which represents organisations across the healthcare sector, said the sum fell "way short" of what was needed to keep pace with growing demands on the NHS. Its Chief Executive, Niall Dickson, warned: "One danger is that it simply goes to prop up the existing system, which will simply not be able to cope – even with this injection." 

Rachel Power, chief executive of the Patients Association, said that while the money would stabilise the NHS for a while, "it will clearly not be enough to transform the service to meet the changing needs of patients as the population ages and more people live longer with multiple health conditions". 
 

Do the Figures Stack Up?

The shadow Chancellor, John McDonnell accused the government of making funding announcements that "aren't credible".

There has also been criticism of Mrs May's announcement from within her own party. Sarah Wollaston MP, the Conservative chair of the Health and Social Care Select Committee described the Brexit dividend as "tosh" and said that "tax rises and borrowing will need to be higher as a result".

Doubts have also been raised about the actual annual percentage increase. The Nuffield Trust said the spending increase was likely to prove closer to 3% because the money does not apply to the social care budget, staff training, hospital building projects or public health. Chief Executive Nigel Edwards, said: "While a welcome respite, it will not equip the NHS to make much-needed changes to services, adopt new technologies, or expand the workforce."

A social care green paper for England is expected later this year. "We will come forward with proposals to put social care on a more sustainable footing, and we will set out budgets for both social care and public health as part of the forthcoming spending review," Mrs May said today.

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