Next year, the National Health Service is projected to spend £2 billion more than it has. After inflation, “efficiency savings” and transfers are accounted for, the NHS budget has been static for five years. In that time, demand for its services has grown to a surprising extent, unfortunately at the same time the Health and Social Care Act fragmented and commericialised it, draining more of its scarce resources at the same time. So, with the same resources at its disposal, the NHS has to:
- Provide healthcare for 2.5 million more people, mainly children and pensioners (who account for the majority of GP and A&E (ER) visits
- Meet PFI repayments that have risen by over £1 billion per year
- Meet the costs of a £1.4 billion shake up
- Treat growing numbers of diabetics (who account for 10% of the NHS budget)
- Contribute more to spending on social care
Is it any wonder that the NHS is under visible strain? Whilst the Government boasts that it has ‘protected’ the NHS budget by protecting it from actual cuts, it has neglected to provide for a large expansion of the population and long-running demographic trends that demand an expansion of the service. The Coalition might point out that, despite this, patients are still being treated, surgeries still being performed… In short, the NHS is still functioning, and is more efficient to boot. But that overlooks the very real decline in the quality of healthcare it offers. It is now harder than ever to secure non-emergency medical treatment; waiting lists for surgery have once more become an issue; and there is a growing sense that care is being ‘rationed’.
Privately, politicians are beginning to acknowledge that the present situation is unsustainable. Not only is the NHS is now faced with the prospect of running out of money at the end of the financial year, but that £2 billion shortfall is projected to grow to as much as £30 billion by 2020. That figure may be slightly alarmist, but the shortfall will be at least half of that. There is a consensus that “something must be done” but nobody is prepared to discuss the grim implications in an election year.
Image source: scirocco2morocco.blogspot.co.uk
Actually, that’s not quite right. Andy Burnham privately floated the ideas of increases in National Insurance (NI) and later Inheritance Tax to bolster the NHS, but on both occasions was hastily slapped down by the Shadow Chancellor, who categorically ruled out both measures, for fear of being painted as a ‘tax and spend’ party. No, Labour’s official position is that the NHS deficit can be met by savings from the integration of social care services into the NHS. Tellingly, this was announced last week by junior Labour spokesperson Liz Kendall, and not Mr Burnham.
Possibly because the policy is nonsensical.
Supposing that administrative savings could be made, it’s doubtful that they would plug the deficit. The most optimistic estimate of savings is £8 billion a year- some 40% of the social care budget! It’s unlikely that administration consumes nearly half of social care spending, to say the least. It follows that all Labour would achieve is the postponement of the funding crisis by one or two years. Administrative savings cannot pay for the new hospitals, the thousands of extra hospital beds, the new doctors and nurses and the millions of extra prescriptions that Britain needs.
If Labour lacks answers, the Conservatives do not. They are pondering whether to adopt the NI-rise policy so foolishly discarded by Labour, or to accept the proposals made by Reform, the right-wing think tank. It seems Reform’s preferred method of sustaining Britain’s universal health service is not to sustain it. They propose a £120 per-year NHS ‘membership fee’, charges for overnight hospital visits and the means testing of continuing care. This is supplemented by ominous rumours of the next Conservative government imposing a £10 ‘administration fee’ for GP visits or charging patients for ‘self-inflicted’ health issues. These measures would certainly prevent the system becoming bankrupt, but it would be the end of the NHS as a ‘free’, collective public service.
The NHS will be on a sustainable footing- that is, will have the expanded resources it needs- within the next few years. The only question is if that will be achieved through higher public spending or the imposition of fees. Regardless of the calculations made by the evangelical Tory right, the public will not tolerate the latter. (Ultimately, I trust Labour to keep the service intact, even if it is currently in denial about what that will entail.) The extra NHS funding will come from higher taxation, which parties are choosing to reject, or even deeper spending cuts made elsewhere. But with the next Government inheriting a budget deficit of £70 billion and the Department for Work and Pensions, local authorities, schools and the student finance system all straining just to meet their legal obligations on the lowest possible budget, I can’t see any spare money lying around.
