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Think tank calls for parliamentary inquiry into healthcare funding

Think tank calls for parliamentary inquiry into healthcare funding
By Valeria Fiore Journalist intern
22 June 2018

A parliamentary inquiry could shed light on how to fund health and social care, a think tank has suggested.

In its reportHow to fix the funding of health and social care –  published yesterday, the Institute for Government (IfG) said that the Prime Minister’s long-term funding announcement for the NHS will be difficult to deliver unless the Government draws up a plan for how the extra money will be raised.

It comes as Ms May pledged that the NHS England budget will increase by more than £20bn by 2023/2024, representing  a  3.4% annual increase over the next five years.

The report concluded: ‘Even if the proposals were not fully implemented before the next election, the conclusions of a cross-party inquiry could be easily picked up by a future government of any political leaning.’

Nick Davies, programme director at IfG, said: ‘Fixing health and social care funding is critical but implementing the tax rises which are likely to be necessary to pay for it will be controversial.’

An independent body that will monitor how the Government spends its budget for health and social care should also be put in place, the report suggested.

It added that the ‘functions could be placed in an existing institution – such as the Office for Budget Responsibility’.

A Department for Health and Social Care spokesperson said: ‘To secure the future of the health service as it approaches its 70th birthday, the Prime Minister and Jeremy Hunt have increased NHS funding by an average 3.4% per year,  which will see the NHS receive £20.5bn a year in real terms by 2023.’

‘Brexit dividend’

Ms May said some of the money that will be used to fund the NHS will come from the cash the UK will no longer invest on its annual EU membership, the so-called ‘Brexit dividend’.

However, the IfG report dismissed this idea.

The report said: ‘Given that the Government’s own forecasts suggest there will be no such dividend, the Prime Minister was not being entirely straight with the British public. By failing to clarify the source of the additional funding committed, the Government is effectively trying to muddle through again.

‘Unless there is a clear plan for how the additional money will be raised through higher taxes or from other sources, it will effectively come from cuts to other parts of public expenditure.’

Need ‘clear way to raise additional money’

Ms May said she will not reveal how the NHS cash injection will be funded  until the next Budget, but the IfG commented that ‘unless there is a clear way to raise the additional money it will have to come from cuts to other parts of public expenditure’.

Some of the money is likely to be raised through a tax increase, as chancellor Phillip Hammond said in his annual speech at Mansion House yesterday.

Mr Hammond said: ‘This week, the PM announced a five-year NHS funding package that will boost spending on health by over £20bn a year in real terms in England alone. [This will be] partly funded by lower contributions due to Brussels, making the NHS our number one priority in the forthcoming Spending Review.

‘But, she also confirmed we will stick to our fiscal rules and [we] will continue to reduce debt. As the Prime Minister said, taxpayers will have to contribute a bit more, in a fair and balanced way, to support the NHS we all use.’

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