Analysis reveals scale of health funding increases needed

New analysis from the Health Foundation has revealed the scale of funding increases needed to meet the demands of coronavirus and secure the nation’s health for the long term.

The charity’s new report warns that the government risks losing sight of the action needed now to shore up the future of health and care post-coronavirus. The analysis shows that this year and next, coronavirus alone is likely to result in extra health service costs of around £40 billion a year. Most of these costs are temporary and directly related to managing coronavirus (£27 billion for PPE and test and trace) but not all.

While huge uncertainty remains, the Health Foundation says that beyond next year the health service could still require ongoing funding increases of around £10 billion per year by 2023/24. This includes the costs of addressing the backlog of care while accounting for lost productivity, meeting rising demand for mental health care and delivering the service improvements set out in the NHS Long Term Plan.

To deliver the Long Term Plan and put NHS services on a sustainable footing after the pandemic, the analysis suggests that there needs to be continued investment in public health of £3 billion extra a year, workforce training needs to increase by £1 billion and capital by around £1 billion.

Alongside funding for the NHS, the charity estimates that required improvements to adult social care will need an extra £6.1 billion in 2021/22, in addition to any specific coronavirus costs, rising to £11 billion per year by 2023/24. This would allow for improvements in the current threadbare safety net for social care — including by boosting staff pay and increasing the availability of care - and to more fundamentally reform the system to make it fairer and more generous for vulnerable people.

Set against this analysis, the charity says the trailed spending review allocation of an extra £3 billion for the NHS will go some way to helping tackle the treatment backlog and support mental health services, but is only a start to the path to recovery for the health service.

Jennifer Dixon, chief executive of the Health Foundation, said: “Our new analysis reveals the scale of funding needed if the government is going truly to return the nation to health post-Covid. The cost of these big investments is daunting but the cost of not investing is likely to be even greater – the backlog in care could be dwarfed by a bigger ‘frontlog’. The government should take the opportunity to come good on its election pledges on the NHS, social care, ‘levelling up’ the country, and making better health a genuine goal of public spending.

“The cumulative impact of years of underfunding combined with a once-in-a-century global pandemic means the government needs to take bold action now and in the medium term. This investment in the future will signal that work has begun on the government’s ambition to build back better, and healthier too.”