The new Prime Minister has said this week that NHS funding will be ‘prioritised’ when it comes to spending decisions, while NHS bosses seek up to £7 billion in extra funding. That is wrong.
In 2000, government health expenditure in the UK was equivalent to about 14 per cent of total public spending. By 2009, as the Labour government came to its end, that had risen to 16 per cent. Then came the period of Tory austerity, from 2010 onwards. Other departments were cut dramatically, but the NHS was ringfenced and NHS expenditure continued to rise. Total health expenditure reached the equivalent of 17 per cent of public spending by 2013, 18 per cent by 2018 and 19 per cent by 2019, an inexorable ratchet. (And this is setting aside the huge spikes during the pandemic.)
But why? If we want spending to be cut, we should surely want to cut it in the areas where it has expanded the most and expanded the most recently, rather than asking other departments to face real-term cuts that set their budgets back decades (as happened during the post-2010 austerity period). The NHS isn’t the only thing that matters.
Even if we thought nothing other than public spending on the vulnerable mattered (which we should not) why were benefits cut in the early 2010s and on the table for being cut now, to fund an ever-increasing NHS budget? Sick people matter, sure, but so do the disabled, the poor and the down on their luck.
The notion that whenever we need to cut spending, we absolutely must be willing to cut everything other than the NHS is madness
People say that health spending must rise because ‘health inflation’ is higher than other types of inflation. But that is to put the cart before the horse. The reason the prices of healthcare activities rise faster than general inflation is that there is an ever-increasing pot of money available for healthcare so pricing pressures are less. A more constrained NHS budget would lead to lower health inflation.
People say we must expect healthcare costs to rise faster than other costs because we have an ageing population. But that means we should want more outputs from our health system, not inputs rising faster. Everywhere else in the economy we expect productivity to improve over time (though progress on that front has been poor in recent years – partly, though to be fair not only, because of the huge and increasing anchor the NHS constitutes for the economy). What we should want from the NHS is for funding to go down relative to GDP but performance go up. Instead we have an NHS we boast of as the ‘envy of the world’ on the basis of cross-country studies showing the NHS is quite good at everything except keeping people alive.
The notion that whenever we need to cut spending, we absolutely must be willing to cut everything other than the NHS is madness. When even the Tories are signed up to that idea you know the country is in serious trouble. Periods of austerity are not nice. We wish they weren’t necessary, but sometimes the economy doesn’t grow as rapidly as we’d hoped. When we must cut public spending we should be willing to cut all public spending, not ‘all except the NHS’.
We might wish that our economy was growing faster, so that we were all richer and as a consequence could afford things like a fancier health service. But it isn’t. So we have to make do with less than we want. And when we have to make do with less, that should apply to the NHS as well as everything else. Otherwise the NHS will continue to grow inexorably relative to the rest of the state and eventually our government will be little more than a health service with a few Treasury officials attached arranging to pay for it.
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