Chris Ham is CEO of The King’s Fund.
A recent Conservative Home survey found that more than two in five readers would support tax rises to increase funding for the NHS, underlining that this issue increasingly unites voters across the political spectrum. The King’s Fund’s analysis of new data from the British Social Attitudes Survey, published last week, reinforces this.
Our analysis of the 2017 survey found that 86 per cent of respondents said that the NHS faces a major or severe funding problem. Sixty-one per cent of respondents support tax rises to increase NHS funding, including 56 per cent of Conservative Party supporters. These findings take on added significance in the light of Theresa May’s landmark commitment in evidence to the House of Commons Liaison Committee to increase NHS spending as part of a multi-year settlement.
Finding the resources to make this investment is not easy after the longest squeeze in NHS finances since its inception. The impact of this squeeze was evident during the winter, when most hospitals failed to hit key waiting time targets and senior doctors claimed that some patients were dying because of delays in their treatment. The growing pressures on the NHS reflect rising demands from an ageing population, particularly among people who are frail and have multiple health needs.
The Prime Minister’s commitment has created an expectation of substantial increases in funding to invest in improvements in patient care over five or perhaps ten years. This is a hugely important shift from the Government’s previous position that the NHS had received the funding its leaders had requested. To meet rising demand for care, NHS spending increases would need to be on a par with long term funding growth.
This would mean finding around £4 billion a year from 2019 onwards. The challenge for the Government is to how fund this level of spending when there are many competing claims on available resources. Uncertainty surrounding Brexit adds to the reluctance to increase funding, even if the public finances are now recovering more rapidly than expected.
The British Social Attitudes survey and other recent polling suggests that increasing National Insurance contributions and earmarking the resources raised to tackle the financial pressures facing the NHS could have support across the political spectrum. Hypothecated taxes have traditionally been resisted by economists and others but the mood seems to be moving in their favour, at least as a way of finding the additional resources the NHS has been promised.
Nick Macpherson, the former Treasury mandarin, has given his backing to the idea, as have Conservative MPs such as Nick Boles and Johnny Mercer. There is also a precedent from Labour’s time in office when Gordon Brown as Chancellor increased National Insurance contributions to fund NHS spending increases, a move that was supported by Conservative as well as Labour voters.
Various options exist for raising the required resources, ranging from an across-the-board increase in contributions to removal of the exemption on people working past state pension age to continue paying. Asking wealthy baby boomers to bear a higher share of the cost would be in line with David Willetts’s argument for greater intergenerational fairness in the tax system.
Whatever choices are made, the Government will expect NHS leaders to come up with a credible plan that sets out how the additional resources that have been promised will be used. Immediate priorities are to get back on track in delivering national waiting time standards, invest in high priority services such as cancer, mental health and general practice, and eliminate hospital deficits.
Just as important is to transform how care is delivered. Joining up the services of GPs, community nurses and social workers, and providing additional support to people in care homes, has moderated demand for hospital care in areas that are furthest ahead in doing this. Earmarking some of the additional funding that has been promised to extend this work should be a high priority.
These and other improvements depend on training and retaining the doctors, nurses and other staff needed to deliver care. The workforce strategy that has been promised for the summer needs to set out what will be done immediately to reduce the pressure on front line staff who have become shock absorbers in an under resourced system. The aim should be for the UK to become less reliant on overseas recruitment and more focused on training the workforce of the future.
As the Prime Minister’s decision to rename Jeremy Hunt’s department indicates, securing the future of the NHS also depends on tackling the growing crisis in social care. Hunt is leading work on a green paper that offers an historic opportunity to bring together the funding and provision of the NHS and social care as advocated by the Barker Commission in its 2014 report. Seizing this opportunity would address the concerns of Sarah Wollaston and others on the need to work towards a cross party solution to health and social care funding.