NHS crisis for its 70th

By Sam Clayden | 29 May 2018

In little over a month, the NHS will turn 70. Not long after that, the Government is expected to publish a green paper on health and social care.

The public is becoming evermore aware about the state of the health and care system, while journalists, politicians and commentators have been raising their voices louder each week.

All the while, the think-tanks are capitalising on this potentially game-changing moment as, one by one, they publish damning reports, piling increasing pressure on the Government to be radical.

The latest, by the influential Health Foundation and Institute for Fiscal Studies (IFS) think-tanks, follows on from Lord Darzi’s recent review by proposing mammoth increases in health and care spending funded through increased taxation.

‘We will need consensus both on the value of an effective health and social care system and on how to raise revenue to fund it as the economy grows,’ the think-tanks say. ‘We can’t have it for free. If we are to raise spending… then taxes will have to rise.’

The paper says spending needs to increase by 2% of GDP over the next 15 years to maintain current levels of performance and by 3% if the service offer is to be modernised. That means at least £40bn of additional funding, or more than £60bn for improved services.

‘In the past, we have effectively paid for increased Government spending on health by cutting spending on other things,’ the report reads.

‘Going forward, it is extremely hard to see how we could repeat a similar trick. There is barely any defence or housing budget left to cut. Debt interest spending is likely to rise as interest rates rise. After eight years of austerity, there would appear to be no room to cut other big areas of spending.

‘While increased borrowing could fund rising health spending over the short term, sustained increases in health and care spending will require increased revenues from somewhere.’

The think-tanks say it is unlikely that increasing charges or introducing new ones will be able to produce a significant fraction of the amount of money needed to keep the health and care system afloat.

‘The implication is clear: in the medium-term, if we even want to maintain health and social care provision at current levels, taxes will have to rise.’

The report stops short of suggesting any particular tax increase, but says it would be ‘hard to imagine’ raising this kind of money without increases in at least one of the three biggest taxes – income tax, National Insurance and VAT.

‘By way of illustration, you can raise about £5bn by increasing all the main rates of income tax by a penny, about £6bn by putting a penny on VAT and about £10bn if you put a penny on each of the main employee, self-employed and employer NI rates,’ the report says.

It also points out that the tax burden in the UK remains ‘well below’ that in several other, ‘economically successful European countries’, including Germany and France.

The problem is whether plans to make residents pay more for health and care are palatable to the public.

In what seems like a lifetime ago, the Conservative General Election manifesto proposed that anyone with assets of more than £100,000, including their home, would have to pay for care until their assets shrunk to that baseline.

Just four days later, after being branded the ‘dementia tax’, the plans had been dramatically softened with the addition of a cap on the amount they have to pay.

The Health Foundation/IFS report however, suggests there is evidence that some kind of tax increase to fund health and care may be politically feasible. It quotes a 2016 survey of British social attitudes, saying the public would prefer ‘higher overall taxes and spending and a clear majority see health spending as the top priority for extra cash’.

The same survey found there was a preference among the public that any tax increase should be via the National Insurance system and/or earmarked specifically for the NHS.

However, the Health Foundation/IFS report says that while some form of hypothecated tax is possible and may make increased taxation more palatable for the public, ‘it is hardly a panacea’.

This report and Lord Darzi’s health and social care review for the IPPR think-tank earlier this month were insistent that an increased focus on public health, early intervention, prevention and community based services were vital if the system was to be put on a stable footing. This is something the sectors themselves have been shouting about for some time.

Wellbeing spokesman for the Society of Local Authority Chief Executives, Paul Najsarek, said: ‘If we want to give the NHS a meaningful 70th birthday present with many happy returns then we need an equal investment in social care and prevention, both in the short and long-term and to continue to move towards a place-based budget, rather than separate pots.’

However, spending on primary care has fallen since 2010 in real terms. The Health Foundation/IFS reports says it is unlikely that ‘rebalancing away from primary and community care makes sense in the long run’. It adds: ‘A sustainable, high-quality healthcare system is likely to involve more focus on supporting primary and community services, not less.’

With the population and people increasingly living with multiple chronic conditions growing by 8% a year between 2003 and 2016, a sole focus on acute care cannot be the answer. The think-tanks say: ‘The NHS can do a lot, but progress on improving the population’s health will require action on obesity, smoking, alcohol and the wider social determinants of health.’

According to the report, since 2010, health spending has faired well relative to other areas of public spending, rising as a share of total public spending by 2.1% a year since 2009/10.

Spending on social care, on the other hand, has not had the same luck, falling by nearly 10% since 2009/2010. ‘The two systems cannot be considered in isolation,’ the report says.

Speaking to The MJ, NHS Confederation chief executive Niall Dickson says: ‘There’s a huge and growing awareness about how inter-dependent health and social care are. More public money is required to go into social care.’

Whether that will happen, we will have to wait to see what policy ideas stem from the upcoming green paper. A spokeswoman for the Department for Health and Social Care says timings have not been confirmed but it will ‘very likely’ be published ahead of the summer recess.

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