NHS Funding: Theresa May Unveils £20bn Boost

The NHS in England is to get an extra £20bn a year by 2023 as a 70th “birthday present”, Theresa May says.

It means the £114bn budget will rise by an average of 3.4% annually – but that is still less than the 3.7% average rise the NHS has had since 1948.

The prime minister said this would be funded partly by a “Brexit dividend”, but also hinted at tax rises.

Labour said the government had failed to fund the NHS properly and was relying on a “hypothetical” windfall.

Shadow health secretary Jonathan Ashworth said Labour’s taxation plans meant his party could match the Conservatives’ spending plans and “will go further.”

In her BBC interview, Mrs May did not spell out how the £20bn a year would be funded but said: “As a country we will be contributing more, a bit more, but also we will have that sum of money that is available from the European Union.”

‘Populist arguments’

But Commons Health and Social Care Committee chairwoman Sarah Wollaston described the idea of a Brexit dividend as “tosh”.

The Conservative MP accused the government of using “populist arguments rather than evidence”.

And the director of economic think tank the Institute for Fiscal Studies (IFS), Paul Johnson, has tweeted to say “there is no Brexit dividend”.

The five-year plan covers just front-line budgets overseen by NHS England.

About a 10th of the overall health budget is held by other bodies for things such as training and healthy lifestyle programmes, including stop smoking services and obesity prevention programmes.

The BBC understands these will be protected, but beyond that it is unclear what will happen to them.

The 2015 spending review – the last time a five-year settlement was announced – saw these budgets cut to help pay for an £8bn increase in NHS England’s budget.

The announcement means extra money will also be made available for Scotland, Wales and Northern Ireland, although it will be up to the Welsh and Scottish governments to decide how that is spent.

‘Don’t forget social care’

Speaking to the BBC’s Sunday Politics, Mr Ashworth said Labour’s tax plans meant it would be able to fund this but added that the exact percentage of how much Labour could increase spending by would have to wait until the chancellor presented his own spending plans.

And shadow chancellor John McDonnell dismissed the government as a “publicity stunt”, adding: “Can you imagine if I came forward with this? There’d be accusations of magic money trees. This is a magic money forest that’s come out this morning.”

Ian Dalton, head of NHS Improvement, a regulator in charge of monitoring performance in the health service, said: “This settlement is good news for the NHS, those who use it and those who work for it.

“It will enable the dedicated staff in our NHS to go on improving the care we can offer the patients.”

But Chris Hopson, chief executive of NHS Providers, which represents NHS trusts, said the settlement was the “minimum” that was needed.

“After almost a decade of austerity, the NHS has a lot of catching up to do.”

He also pointed out that the government needed to work out what it was going to do about social care run by councils.

Ministers have promised the system, covering care homes and help at home, will be reformed soon to ensure there is better access to services.

Niall Dickson, chief executive of the NHS Confederation, which represents healthcare organisations, said the announcement “isn’t a bonanza by any means” and that it fell short of the of the 4% extra-a-year figure an independent report had suggested was needed.

However, he added: “It’s a lot better than we’ve been used to over the last few years.”

Is a ‘Brexit dividend’ paying for this?

In her BBC interview, Mrs May said the funding boost was partly coming from a “Brexit dividend”.

“Some people may remember seeing a figure on the side of a bus a while back of £350m a week in cash,” she said.

“I can tell you that what I’m announcing will mean that in 2023-24 there will be about £600m a week, more in cash, going into the NHS.

“That will be through the Brexit dividend. The fact that we’re no longer sending vast amounts of money every year to the EU once we leave the EU.”

But she also conceded that “as a country” we will need to contribute more.

She did not spell out that would require tax rises, although a recent report by the IFS said they would be needed as it was hard to imagine the money could be found from economic growth or raiding other areas of government spending.

But Mr Johnson, of the IFS, questioned the claims.

He said the government had accepted Brexit would weaken the public finances and the financial settlement with the EU plus commitments to replace EU funding “already uses up all of our EU contributions” for the next few years.

Is this more than expected?

There has been a lot of speculation that Health Secretary Jeremy Hunt – supported by NHS England chief Executive Simon Stevens – had been pushing for close to 4% a year extra.

This was the figure many in the health service had said was needed to get services back on track and to improve waiting times.

Reports have suggested the Treasury were initially offering less than 3%.

So the 3.4% average appears to be a compromise between the two camps – and is close to the 3.7% average increase the NHS has seen if you look back over the last 70 years.

The final picture is somewhat clouded by the lack of clarity about what will happen to the wider health budget.

What it does mean is that the five-year funding plan announced in 2015, which was meant to see the budget increase by £8bn above inflation by 2020, has been effectively ended two years early.

And that comes after ministers agreed in autumn 2017 to top that up by another £2.8bn.

Source: BBC