Update 17th December 2015: The Nuffield Trust comments on the spending review. “The Spending Review: what does it mean for health and social care?” (See summary at bottom of post)
A recent editorial in the BMJ looks at how the funding crisis has been deferred but not averted
“The future funding trajectory for the NHS looks grim. Overall, healthcare spending will grow by less than 1% a year in real terms over the next five years.10 Because that is less than the rate of economic growth predicted by the Office for Budget Responsibility, the share of gross domestic product (GDP) spent on public healthcare will fall between 2015 and 2020,11 probably to well below the current EU-15 average of 9.9% of GDP.12
This is no accident. The government has committed to reduce government spending as a share of GDP, from 45% when it entered office in 2010 to 36% by 2020.13 This involves a radical reshaping of the public realm. Although healthcare spending has enjoyed some protection, this has taken no account of the effects of big cuts in social care or the inexorable demographic and other pressures. By 2020, the NHS might simply not be financially sustainable in its current form.”
The following charts indicate the parlous state of NHS and Social Care funding………from The King’s Fund
A Truly appalling picture for both health and social care spending in the UK .
The headline settlement for the NHS was generous. However, a redefinition of what counts as “NHS spending” conceals a less favourable picture. While NHS England’s budget will increase by £7.6 billion in real terms over the period, this will come at the expense of a £3 billion cut for other areas of health spending. Public health spending will fall by at least £600 million in real terms by 2020/21, on top of £200 million already cut from this year’s budget. This will affect a wide range of services including health visiting, sexual health and vaccinations.
The additional spending will rightly be focused in the earlier years of the parliament, with a significant increase in 2016/17. However, much of this money will be absorbed by dealing with deficits among NHS providers and by additional pension costs.
Spending on social care is likely to be broadly flat through the next parliament. We welcome additional funding from the council tax precept and Better Care Fund. However, the council tax precept is unlikely to raise as much as initially claimed, and the extra funding will not be enough to close the social care funding gap which we estimate will be somewhere between £2.8 billion and £3.5 billion in 2019/20.
Overall, spending on health and social care will continue to fall as a percentage of GDP. Given rising need for these services they will continue to be under intense pressure, and especially for social care, a new settlement will eventually be needed.