NHS faces ‘bleak’ funding prospects
pharmafile | July 29, 2009 | News story | |Â Â NHS, healthcareÂ
The prospects for future funding of the NHS "now look bleak", according to a new report by the King's Fund and the Institute for Fiscal Studies that unpicks public spending priorities.
How cold will it be? Prospects for NHS funding: 2011-17 offers three stark alternatives for NHS funding – low growth, no growth and negative growth – over the next eight years.
NHS spending in England has more than doubled since the financial year 1999-2000, but now real annual funding increases of around 1.1% are needed just to maintain quality of care.
Only the report's most optimistic funding model would achieve even this target, and the authors say it is hard to see how tax rises or 'significant" reductions in other government spending can be avoided if the NHS budget is to be increased in real terms.
Much of the problem now is down to the recession and these dire predictions blow a hole in Sir Derek Wanless' review of the future of healthcare spending, which was issued long before the present financial crisis in 2002.
The report's sunniest look at NHS funding says that by 2016-17 there would be a gap with Wanless' most optimistic view of around £4 billion.
But the shortfall increases dramatically under the report's more pessimistic forecasts to between £21 billion and £30 billion – or almost 30% of current NHS spend in England.
However, even this pales when the doomsday scenarios – the lowest level of funding at a time when the highest level of funding is needed – in both this report and the Wanless review are compared.
In that case the gap would be nearly £40 billion at 2010-11 prices, the report says.
Both Labour and the Conservatives have pledged to maintain NHS spending in real terms.
For this to be the case there will be significant repercussions for departmental spending elsewhere and for taxation generally.
For example, the report outlines the effects of the NHS receiving a 3% real increase each year between 2014-15 and 2016-17, with a 1.5% boost for other departments over the same period.
This would require a permanent increase in tax – or cuts to social security benefits and tax credits – of £17.1 billion by 2016-17. This is equivalent to £540 per family.
A freeze across non-NHS spending departments would still mean that £6.9 billion – or £220 per family – would need to be found.
When it comes to NHS funding there are only a few realistic choices available, the report says, and "none, as we have shown, comes free of trade-offs or effort".
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