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Despite a pandemic, record waiting lists and growing rates of ill health, real-terms spending on the NHS has risen less quickly than planned, according to a new report by the Institute for Fiscal Studies.
The report states that this “breaks the habit of a lifetime”, as over the past 40 years, the NHS budget has almost always grown more quickly than originally planned.
In fact, disregarding the recent years when pandemic funding was withdrawn, the last time that the health budget failed to grow for two consecutive years was in the 1950s.
The Royal College of Nursing says the lack of funding is causing patients to “suffer greatly” with NHS staff left to “pick up the pieces”.
Keeping spending flat ‘unlikely to be a sustainable long term strategy’
The pre-election IFS briefing, funded by the Financial Fairness Trust and the Nuffield Foundation, examined the past and future of UK health spending.
In 2019, the Conservative party implied that day-to-day health budget in England would rise by 3.3% per year in real terms. However, spending has increased by just 2.7% each year between 2019 and 2024 – a shortfall of £5.5 billion.
This implies no real-terms growth for the NHS England budget between 2023–24 and 2024–25, and there are currently no plans for health spending beyond this point.
The IFS says given the well-documented pressures on the NHS, holding spending flat in real terms is unlikely to be a ‘sustainable long-term strategy’. They add that low capital spending has resulted in the deterioration of the NHS estate in England, where the maintenance backlog has more than doubled over the past decade.
The NHS England workforce plan (endorsed by both main UK parties), implies a real-terms funding growth of around 3.6% per year. The IFS say this is a more ‘realistic benchmark’.
Delivering NHS funding increases would require cuts elsewhere
Political party leaders are now being urged to set out their spending plans ahead of the general election in order to provide a clearer picture of how their government would meet the demands for NHS care.
Max Warner, a Research Economist at IFS and an author of the report, said: “Whichever party takes office after the next election won’t have long to set out departmental budgets for the next fiscal year, and the choice of how much to give to the Department of Health and Social Care – which now represents more than 40% of total day-to-day departmental spending – will effectively dominate everything else.
“Spending on the health service will have to rise in real terms to meet the pressures the service faces and deliver the workforce plan which both the main UK parties have signed up to. But the sheer size of the health budget means that delivering funding increases at anything like the historical average would require cuts elsewhere, even before accounting for recent promises on defence spending.
“Neither the Conservative party nor Labour party have been keen to set out spending plans. But the next government will have to confront this reality – and fast.”
Investing in the NHS is ‘good economics’
The Royal College of Nursing has also highlighted that increasing health spending not only benefits patients but also the economy.
Professor Pat Cullen, RCN General Secretary and Chief Executive, said: “You cannot have a productive economy with millions of patients waiting months on end for treatment. And you can’t bring down waiting lists when the NHS is grappling with chronic workforce shortages.
“This is a timely reminder while parties plan election manifestos that investment in healthcare and the nursing workforce that deliver it is good economics – the Prime Minister must waste no time in acting on it.”