Call for tax hike to fund the NHS

The 70th anniversary year of the NHS is a record-breaking one, for all the wrong reasons. Pressures on services and missed performance targets are in many ways at their all-time worst.

While it’s a health service of world-class treatments, academic brilliance, major trauma centres that fix patients more broken than ever before and an undoubtedly dedicated, talented staff, it’s also one of rota gaps, burnout, 12-hour trolley waits and penny pinching.

It is in this environment – in the wake of the worst winter on record; a winter crisis threatening to become a year-round crisis – that the NHS Confederation, representative of healthcare leaders, commissioned the Health Foundation and the Institute for Fiscal Studies to find a solution: to look at where the health service has come from, where it stands and what the future could hold.

The report is as stark as the headlines were during the winter just gone.

It reveals that during the last two governments the NHS has only seen average annual growth funding of 1.1 per cent and 2.3 per cent – compared to an average of 4 per cent through the health service’s history, a figure generally viewed as covering new technology and treatments and inflation costs.

The report also shows that by 2033/34 there will be 4.4 million more people in the UK aged over 64 – and the burden of disease and hospital attendances are growing similarly.


A solvable problem

The outlook – particularly in an NHS currently on course to have arguably its most squeezed financial years ever up to 2020 – is bleak.

NHS Confederation chief executive Niall Dickson said: ‘It is now undeniable that the current system and funding levels are not sustainable. Without new ways of delivering services and sustained investment, NHS and care services will not cope, and we will face a decade of misery in which the old, the sick and the vulnerable will be let down.’

But this is not just an assessment of the problems in the NHS; the seemingly unpluggable black holes in starved budgets. This is a report of solutions, a message to Government.

That message is that this is a solvable problem. With political will, public and clinical engagement, and genuine, transparent funding – the NHS can get back on track.

For BMA council chair Chaand Nagpaul, the report is a welcome spotlight on the desperate situation in the NHS.

‘This is a comprehensive analysis of Government spending on health and social care which lays bare the scale of under-investment in the last decade in the NHS and that clearly explains the harsh reality faced by doctors, nurses, NHS staff and patients on the front line every day,’ he said.

‘These problems have to be addressed and corrected urgently and this report rightly looks at what needs to be done to keep the NHS at least standing still – as well as the investment it requires to be the modern, innovative, successful service it has been for much of its 70 years.’


‘One of the biggest choices in a generation’

So what does the report suggest?

In the long run, it demands genuine financial planning, long-term vision and reform of the health service. But in short – a tax hike. And a significant one at that.

Politically, this is difficult. But that does not mean it has to be impossible.

Institute of Fiscal Studies director Paul Johnson, co-author of the report, said: ‘We are finally coming face to face with one of the biggest choices in a generation. This time we won’t be able to rely on cutting spending elsewhere – we will have to pay more in tax.’

Dr Nagpaul said: ‘Clearly new money for health and social care has to be found somewhere and this report has rightly addressed the need for genuine solutions rather than simply addressing the well-known problems we face. The report puts forward a plan for increased NHS spend – we cannot escape the fact that if we want to fund the NHS to a level that is comprehensive we will have to find a fair, and comprehensive, method of funding.’

Those taxes suggested by the report could be as much as 9p extra income tax in the pound – but the report suggests balancing the increase across the three main sources of tax revenue: income tax, VAT and national insurance. By 2033/34 it is suggested the NHS would need around £40bn more just to continue providing the level of service currently delivered – but £60bn for a proper, modern NHS.

Projected over 15 years that could be around £2,000 extra tax per British household, but the authors were keen to point out that the money comes from society being richer, and tax as the result of economic growth and wage inflation.

The report’s plan was a 3p increase on each of VAT, national insurance and income tax – but that other methods like better taxing wealth and property should be considered too.


Time for action

While the figures sound massive and will concern many people – particularly those familiar with the UK as a low-tax country, in contrast to those in Scandinavia or across the channel – the projections actually show that increasing spending on the NHS to these levels would only serve to bring the UK more in line with similar countries like Germany or France, and that is without those countries tackling their own ageing populations. The UK, Mr Johnson says, would – at worst – still be a low-medium tax economy.

Dr Nagpaul adds: ‘The public has long demonstrated its love for the NHS – and the figures outlined in this report do not reflect a luxury investment, they would simply take our NHS to the funding levels normal across similarly wealthy countries in Europe. We are a wealthy country with a comparative low funding of healthcare – and we can afford to do much more if we are honest and face up to the problems we face.’

With the report now published and voices across the health and social care landscape urging immediate action, the ball is now in the Government’s court.

Negotiations with the Treasury and thrifty, low-tax favouring colleagues are not going to be easy, but the prime minister and health secretary Jeremy Hunt have the NHS’ future in their hands. The evidence base is there, the expert opinion is near-unanimous and the crisis in the health service bites more and more, each and every day.


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