Opinion | Tuesday, 6th June 2017
Who will fund the NHS?
In the latest of our comment pieces in the run-up to polling day, Dr Lloyd Strickland examines the state of the NHS
Even during this atypical General Election campaign, the issue of securing the future of the NHS has risen to the fore. But what are the major parties saying about funding the health service? Dr Lloyd Strickland from Manchester Metropolitan University takes a look at the figures.
The NHS is facing its most significant challenges since its inception in 1948. Population growth means more people are using its services. Advancements in medicine and technology mean that people are living longer but often with multiple complex health conditions, disability, and frailty. And difficulty accessing publicly-funded social care means that many older people are unable to leave hospital, putting a further strain on the NHS. Currently, around 70% of the NHS budget is spent on people with long term conditions, and the problem is only going to get worse. On top of the funding pressures caused by an increasing and ageing population, the very advancements in medicine and technology that help us to live longer also have to be paid for, requiring considerable investment.
All of these pressures mean that the NHS budget, which stands at £124bn for England in 2017/18, is not sufficient. The Chief Executive of NHS providers, Chris Hopson, has said the NHS is facing a £¾bn funding deficit for this year alone. But as costs continue to spiral due to far greater demand for services, the funding gap is estimated to reach £30bn by 2020/21 if no changes are made to address these issues.
Of course, with a general election around the corner, political parties are lining up to offer their cures for the ills of the NHS. To see what they are proposing, I took a look at their manifestos.
Labour
Extra promised over next 5 years
£30bn NHS
£8bn social care
How the extra will be raised
Increasing taxes for top 5% of earners
Increasing taxes on private medical insurance
Conservatives
Extra promised over next 5 years
£8bn (minimum) NHS
How the extra will be raised
Charging overseas visitors more for using the NHS
Increasing the immigration surcharge for migrant workers
Liberal Democrats
Extra promised over next 5 years
£30bn for both NHS and social care
How the extra will be raised
1p on the basic rate of income tax
UKIP
Extra promised over next 5 years
£27bn NHS
£8.05bn social care
How the extra will be raised
Reduction to the foreign aid budget from 0.7% of GNI to 0.2% GNI
The raw figures are apt to be misleading. For example, unlike the other parties, the Conservatives are explicit that their proposed increase to NHS spending is in real terms, that is, above inflation. This means that the Conservatives are committed to increasing the NHS budget by rather more than a flat £8bn over 5 years, though their extra spend is still likely to be less than that pledged by the other parties.
Indeed, according to Chris Ham, Chief Executive of the Kings Fund, the Conservatives’ proposed increase in NHS spending would not be enough to meet rising demand or even maintain current standards of care. Others have questioned where the funds for the proposed increase would come from. The Conservative manifesto mentions only an intention to secure additional revenue from overseas visitors and migrants, but this in itself would not raise significant sums.
Theresa May’s recent statement that we “can only ensure we have a first class NHS, if we have a strong economy to have the funding to put into the NHS” suggests that the Conservatives are instead relying upon economic growth to boost tax receipts which can then be funnelled into the NHS. Such a strategy is of course hostage to the country’s economic fortunes, which even the independent Office for Budgetary Responsibility (OBR) says is uncertain.
The Conservatives are not the only party that has come under fire for its spending plans. The Institute for Fiscal Studies has claimed that Labour has significantly over-estimated the sums that their proposed tax increases are likely to generate, both in the short and long term. Any shortfall would seriously impact on their ability to deliver on their ambitious proposals, which include investment in buildings, equipment, and the workforce, and a new model of community care to bring care closer to home.
The Liberal Democrats are similarly ambitious, proposing significant investment in both health and social care, but it is unclear how much extra they intend to spend on each. Chief Executive of the Nuffield Trust, Nigel Edwards, suggests that a third of the Liberal Democrats’ proposed £6bn annual cash injection is likely to be spent on social care, which would leave £4bn a year for the NHS. While this would relieve funding pressures in the short term, Edwards notes that the growing demands on the NHS means that the funding gap would re-emerge after a couple of years.
UKIP’s plans have come under much less scrutiny. Their proposal to increase spending on the NHS and social care by more than £35bn over 5 years looks impressive, but the amount promised tells only part of the story. According to the UKIP manifesto, the party intends to spend this extra money on more doctors, nurses, and midwives, as well as reducing A&E traffic (for example, by keeping open minor injury units) and increasing funding on mental health.
However, the manifesto says nothing about programmes to improve public health, nor does it mention any investment in hospital infrastructure, innovation, or technology. Therefore UKIP appears to be proposing a short-term fix rather than a long-term solution to the NHS’s woes.
The worrying conclusion is that, no matter who takes power on June 8, the NHS is unlikely to make a speedy or sustained recovery from its current parlous state of health.
