NHS

The Prime Minister has committed to spending increases for the NHS over the next five years and promised this would be at least partly funded by a ‘Brexit dividend’. This is not the first time that NHS spending increases have been linked to the UK’s exit from the EU – the now infamous £350 million per week pledge was a significant feature of the 2016 referendum campaign.

Following widespread austerity measures introduced in 2009/10, public funding for adult social care has fallen substantially. In particular, funding for social care for people aged 65 and older has been particularly hard hit, falling by 21% between 2009/10 and 2015/16. While some additional money in recent years has reversed some of these cuts, these funding decisions are likely to have had a number of consequences for users of social care, their carers and for other related public services. But what do we really know about their impact?

Yesterday we heard the first details of a new five-year funding settlement for the NHS in England. It was announced NHS England funding would be slightly more than £20 billion higher in 2023-24 than in 2018–19 after adjusting for forecast economy-wide inflation over the period. This represents a larger increase in funding for the NHS than we have seen in the last 8 years, but remains below historical average growth in UK health spending (3.7% per year).

Yesterday, the Prime Minister announced a ‘70th Birthday present’ for the NHS, pledging average real annual increases of 3.4% per year for the next five years. One challenge for the Government is where the money to pay for this will come from. After social security spending, the NHS is the single biggest element of government spending, so a large increase in NHS funding has significant implications for the public finances.

Public spending on social care for older people in England has seen large cuts in recent years, falling by 21% between 2009–10 and 2015–16. This has led to growing concerns over the potential for adverse effects on other public services, and in particular the NHS.

Ministers will have to make unpopular decisions on taxation to raise health service funding, says Thomas Pope of the Institute for Fiscal Studies.

How should we fund social care? When you try to answer such a big question, you quickly realise there are a whole host of underlying questions one needs to think about.

Recent IFS work (joint with the Health Foundation) documented the considerable pressures on health and social care spending over the next fifteen years. In the near term, an announced funding settlement for the NHS covering the next few years may be on the horizon.

Over the past 50 years we’ve pulled off a pretty remarkable trick. We have spent an ever growing fraction of our national income on the welfare state in general, and on health in particular, without apparently having to pay for it. The tax burden, at about 34 per cent of GDP, is not substantially higher now than it was half a century ago. The same is true of total government spending. As a fraction of national income it’s much the same as it was in the mid-1960s.

Will Brexit mean more money for the NHS?

This article by Paul Johnson, published in the Times Newspaper, looks at the issue of hypothecating taxes for the NHS.

Maternity units in England operate at 100% capacity much of the time. When capacity is breached, units may occasionally have to close temporarily to new admissions, causing stress to women in labour and undermining their choice over where to have their babies. New work by IFS unpicks some of the causes of closures.