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‘Soaring inflation’ means NI levy is worth less, health leaders say

‘Soaring inflation’ means NI levy is worth less, health leaders say

By Jess Hacker
7 April 2022

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The National Insurance (NI) tax hike intended to tackle Covid backlog costs will be worth less in light of rising costs and ‘soaring’ inflation, health leaders have said.

The controversial health and social care tax levy – which came into effect yesterday (6 April) – is projected to raise around £39 billion over the next three years.

However, the ongoing cost-of-living crisis and the need for the NHS to absorb Covid costs previously paid for by the Government, will mean render the funds less valuable, it has been said.

Dr Layla McCay, director of policy at the NHS Confederation, said: ‘Health leaders will never take for granted the additional funds that have been given to the NHS and they will do everything within their power to put it to best use for their patients.

‘However, the simple truth is that with rising costs and inflation, on top of the NHS having to absorb Covid costs that were previously paid for by the Government, the new levy is now worth, and will deliver, less.’

She added that rising Covid infections – with one-in-13 currently infected – are having a ‘direct knock-on effect’ on the NHS’s effort to tackle waiting lists, which ‘would not have been expected when the levy was set nearly six months ago’.

Similarly, Chris Hopson, chief executive of NHS Providers, warned that the new funding must be viewed in its ‘proper context’, flagging that the 2010s saw ‘the longest and deepest financial squeeze’ in the health service’s history.

He said: ‘When it was announced, this funding increase only took NHS annual funding rises back to their long term average. But even that is now being eroded by the impact of inflation; the need to fund ongoing COVID-19 costs, including £330m for testing; and increased efficiency demands.’

He added that this should be in addition to the fact that NHS staff need ‘an appropriate pay rise this year to cope with the increases in cost of living’.

It comes after the BMA urged the Government to do more to protect NHS staff from the rising cost of living

Devender Khurana, BMA East of England regional council chair and consultant orthopaedic surgeon, said: ‘The Government must urgently address this by delivering a fair pay award above inflation for NHS staff that accounts for the rising cost of living, and by taking greater action to bring food and fuel prices under control.’

Earlier this week, the annual NHS staff survey revealed that nearly one-in-three staff in England reported often thinking about leaving the organisation.

And last month, the Treasury was criticised for not pledging any additional funding for the NHS in its spring budget plan.

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