Addressing the “black hole” in the health budgets – wait for political denial.

We are slowly seeing the media educate the MPs. One of the problems is that taxing the richest wont work: they will evade by moving money abroad. It has to be the “average man” who funds the 4 UK health services…. NHSreality favours means related co-payments related to ID cards, NI number and eventually taxing capital as well as income. In the end it means rationing overtly, as covert will perpetuate the post code lottery, and this will become increasingly unacceptable. There will be political denial and “more of the same” for a long time yet. It’s going to get worse… 

NHS needs £2000 in tax from every household to stay afloat – report from The Guardian today

Kamal Ahmed for BBC news: Why the Treasury is no fan of a ring-fenced ‘NHS tax’

Henry Bodkin in the Telegraph: Historic Tax Rises on the middle class needed

Sam Coates opines in the Times 24th May 2018: Tax rise needed to plug £95bn black hole in NHS

Income tax will have to go up by 10p in the pound within 15 years to pay for long-term improvement in the NHS, a study says today.

Health spending must increase from £154 billion today to £249 billion in 2034, or 3.3 per cent a year, just to maintain the level of service at present, according to the Institute for Fiscal Studies (IFS). However, chronic underfunding means the NHS needs even more in the short term, with the IFS suggesting an up-front boost of 4 per cent each year. If ministers want to improve the service, they must pay 5 per cent now and 4 per cent in the medium to long term.

Ministers are thought to be discussing a rise in health spending of 3 to 4 per cent a year over the medium term. If they agree a rise of 4 per cent, this would mean health spending increasing by approximately £350 million a week, the amount promised by Vote Leave in the referendum, according to the report that was jointly authored by the Health Foundation and the NHS Confederation, a lobby group for hospital providers. The timing of the announcement, the timescale of any rise or how it will be paid for has not yet been decided.

The report sets out the scale of the tax or borrowing black hole that must be filled to pay for this increase. While some of the cost will be funded by growth, most must come from tax.

The IFS estimates that taxes would have to rise by between 1.6 and 2.6 per cent of GDP, which is between £34 billion and £56 billion in present-day terms. This is equivalent to between £1,200 and £2,000 out of projected net income growth of about £8,500 per household. A penny on the basic rate of income tax raises more than £5 billion, meaning that increases of about 10p in the pound would be needed.

The plan could be funded by borrowing but this would amount to a significant challenge to Philip Hammond, the chancellor, who is determined to drive down spending pressures. At the same time, pressures on social care spending are increasing, and if the existing funding arrangements continue, it is likely to have to rise by 3.9 per cent a year over the next 15 years. Put these figures together and health and social care spending is likely to have to rise by 2 to 3 per cent of national income over the next 15 years.

Paul Johnson, director of IFS and an author of the report, 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.”

Taking into account the increased size and age of the population, there has been barely any growth in health and social care spending since 2010. Age-adjusted per-capita spending has risen by just 0.1 per cent a year since 2009-10.

Niall Dickson, chief executive of NHS Confederation, said: “This objective and independent report makes clear that the next 15 years are going to be even more challenging than the last. Unless we tackle the funding issue and build up the workforce we will see further strain on NHS finances and services. Yes, there are more efficiencies to be made and our services need to be much better at supporting people in the community, but if we want a high-quality NHS and care system we will have to pay for it.”


This entry was posted in A Personal View, Political Representatives and activists on by .

About Roger Burns - retired GP

I am a retired GP and medical educator. I have supported patient participation throughout my career, and my practice, St Thomas; Surgery, has had a longstanding and active Patient Participation Group (PPG). I support the idea of Community Health Councils, although I feel they should be funded at arms length from government. I have taught GP trainees for 30 years, and been a Programme Director for GP training in Pembrokeshire 20 years. I served on the Pembrokeshire LHG and LHB for a total of 10 years. I completed an MBA in 1996, and I along with most others, never had an exit interview from any job in the NHS! I completed an MBA in 1996, and was a runner up for the Adam Smith prize for economy and efficiency in government in that year. This was owing to a suggestion (St Thomas' Mutual) that practices had incentives for saving by being allowed to buy rationed out services in the following year.

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