NHS £20bn spending increase to require UK to ‘contribute a bit more’ says Prime Minister Theresa May
The government will increase spending on the National Health Service (NHS) by more than £20bn by 2022, with firms and consumers “contributing a bit more”, likely through higher borrowing or tax rises.
The increase in NHS England spending will be the equivalent of a 3.4 per cent increase per year in real terms, below the 3.7 per cent historical annual rate of growth.
Prime Minister Theresa May said: “That will be [funded] through the 'Brexit dividend' […] and we as a country will be contributing a bit more.”
The details of the increased borrowing or taxes will be announced by the chancellor, Philip Hammond, before the next spending review, slated for 2019. May will add further details in a speech tomorrow.
Speaking to the BBC, May said: “It means extra money, significantly more money for the NHS. By 2023-24 there will be £20bn more in real terms being spent on the NHS.”
May said that would be the equivalent of an extra “£600m more a week, in cash”, referring to the nominal amount, not taking into account the impact of inflation. May said this will be more than the heavily disputed £350m per week potential boost to NHS spending cited by the Vote Leave campaign before the EU referendum.
The government’s independent forecaster, the Office for Budget Responsibility (OBR) currently predicts the net effect of Brexit to increase borrowing by around £15 billion a year by the 2022-2023 tax year.
The government has not announced any increase in funding of social care, but will publish a green paper.
A £20bn annual increase in NHS spending would represent a significant rise compared to the November 2015 pledge under former chancellor George Osborne of £8bn per year. However, independent analysis by the highly regarded Institute for Fiscal Studies shows that, barring a dramatic and unexpected improvement in the UK’s economic growth, it is highly likely to increase the size of government borrowing or to require an increase in taxes.
In last year’s election manifesto the Conservative party said it has a “firm intention to reduce taxes”, and a “balanced budget by the middle of the next decade”.
Shadow foreign secretary Emily Thornberry said: “We’ve had eight years of underfunding on the NHS and it’s at a state of collapse.
“We want to see where the money is, where it’s coming from,” she said, also speaking to the BBC.
Meanwhile, health experts broadly cite four per cent annual spending increases as the rate required to improve services while addressing the massive change in the UK’s demands as the population ages.
Analysis by the Health Foundation, a think tank, suggests that a 4.1 per cent increase in spending to “tackle some of the fundamental issues” on the NHS, including cutting waiting times, and maintaining adequate staff numbers.