Tax increase needed to deter ‘NHS misery’

The Institute for Fiscal Studies and Health Foundation have reported that taxes are going to have to rise to pay for the NHS if the UK is to avoid ‘a decade of misery’.

The two organisations claim that the NHS will need an extra four per cent a year, the equivalent of approximately £2,000 per UK household, for the next 15 years, and that the only realistic way to finance this would be through tax rises. This would allow some immediate catch-up, enable waiting time targets to be met, and tackle some of the underfunding in mental health services.

Additionally, extra finances are needed to fund council-run social care for the elderly, with adult social care spending likely to have to rise by 3.9 per cent a year over the next 15 years taking an extra 0.4 per cent of national income, relative to today.

Prime Minister Theresa May has promised a long-term funding plan for the NHS, but some reports are claiming that ministers are disagreeing on increases to help fund this, with Health Secretary Jeremy Hunt believed to want at least three per cent a year. In recent years, the annual rises once inflation is taken into account have been limited to just over two per cent.

Paul Johnson, director of IFS, said: “We are finally coming face to face with one of the biggest choices in a generation. If we are to have a health and social care system which meets our needs and aspirations, we will have to pay a lot more for it over the next 15 years. This time we won’t be able to rely on cutting spending elsewhere – we will have to pay more in tax. But it is a choice: higher taxes and a health and social care system which meets our expectations and improves over time, or taxes at current levels and a more constrained health service delivering less than we have become accustomed to.”

Anita Charlesworth, director of research and economics at the Health Foundation, said: “After eight years of austerity, the health service will need a sustained injection of funding just to get back on an even keel, let alone to modernise. The Prime Minister has committed to a long-term funding settlement for the NHS. Maintaining current provision and dealing with the backlog of funding problems will require NHS funding to grow by around four per cent a year for the next five years. Meaningful progress on waiting times, staffing shortages and mental health will need growth of around five per cent a year over that period. Much less than growth of four per cent a year and the NHS will be able to do little more than tread water. It will struggle to fulfil Nye Bevan’s vision of 70 years ago.”