Andy Cowper asks how the promised increase in spending on the NHS is going to be funded
Political physics may not work the way it used to, but the law of political gravity still applies: what goes up must come down. Last week, we had the promise that spending on the NHS will go up in future financial years: now it comes down to how this is going to be funded.
Prime minister Theresa May’s speech at the Royal Free Hospital (which as my colleague Lawrence Dunhill wittily noted, was an apt venue given its £100 million underlying deficit) reiterated her “Andrew Marr Show” nonsense that there will be a Brexit dividend, which I debunked last week.
Impressively, this was not the stupidest comment in Mrs May’s speech. That award was taken by Mrs May’s assertion that “In 2002, the then Labour government significantly increased NHS funding, but much of this did not go on directly improving patient care.”
Oh dear. I cannot improve upon the riposte promptly set out by former prime minister Tony Blair, which read “the prime minister said today that nearly half of Labour’s record increase in investment in the NHS during the last Labour government was not spent on patients. I simply don’t know what she means by that. But if the implication is that, because significant investment went on increased numbers of staff, including nurses and doctors, better pay and a huge uplift in hospital building and NHS facilities, this is not money spent on patients, it shows how little this government understands the NHS and its challenges.
“This investment was absolutely necessary to deliver the significant cuts we saw in waiting lists and waiting times and the dramatically improved results in cancer and cardiac care the new Labour government oversaw, resulting in some of the highest patient satisfaction levels ever seen. All of which, of course, have slid into reverse under this Conservative government.
“This programme of investment and reform was supported by a clear and specific increase in national insurance – unlike the plans announced today which appear to be dependent on mystery tax increases and a mythical Brexit dividend the IFS confirms cannot fund the extra spending.“
The skills of opposition are enduring.
Taxes will rise to fund the NHS spending boost
It has not been escaping people’s attention that the promised funding increase won’t be enough.
The timing of Mrs May’s announcement was very much about managing her MPs over the ongoing chaos of Brexit. She managed to win the Commons vote this week on a vote in Parliament on the final deal, but as I noted last week, her government and her Parliamentary party remain profoundly divided.
The effect of the NHS funding announcement on the Conservative Party’s supporters will be interesting. Already, former Telegraph editor and biographer of Margaret Thatcher Charles Moore described the planned increase in NHS spending as “disgusting”.
The tax rises are going to wait until the budget in November. Mrs May has taken the political gain now: public opinion will also be intriguing. Now the money has been announced, much of the public might believe it’s there.
Read my lips: new taxes
The Chancellor is alert to this threat: in his Mansion House speech, Philip Hammond said “this week, the PM announced a five year NHS funding package that will boost spending on health by over £20 billion a year in real terms in England alone. 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 will continue to reduce debt.
“So, 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. While delivering on our fiscal commitments.”
The Chancellor’s speech was also interesting for his emphasis on “our announcement last week that we will take doctors and nurses out of the Tier 2 Visa cap (which) frees up hundreds of additional places a month for highly skilled workers”. As I wrote previously, it was Mr Hammond who was the last trying to hold the line on the visas for clinicians issue.
I also wrote “it won’t hold”. Nice to get a prediction right …
The Department of Health and Social Care has published a bit more detail about the numbers.
The group sex dilemma
So as I wrote last week, the money is not enough. Equally, it’s what we have got. And much of the rest of the public sector will be looking with envy at the NHS’s ability to get a funding increase.
It will be sitting ill with the Treasury Munchkins that their efforts to keep the funding uplift to about 2 per cent failed. It would be sensible for system leaders at all levels to expect their attitude to be like a customer at a garage, saying ”I have not been servicing and maintaining my car properly for almost 10 years. What do you mean, it’s going to cost a huge amount of money to fix everything?”
Let’s be quite clear: the NHS has done what the government implicitly and explicitly asked it to do on the funding with maintenance underspends, late payments and capital-to-revenue transfers. Capital, estates/maintenance and workforce underspends are now unsustainably dangerous, and vice versa.
We are where we are. Which means that NHS leaders at national and local levels are now confronted with the group sex dilemma: in what order is it best to disappoint people?
A farewell to ARMs
If it’s the British Medical Association Annual Representative Meeting, we can be sure of not only a blast of positivity about the medical profession, but also some daft headline-grabbing resolutions from local medical committees.
This year, Gloucestershire LMC “calls on the BMA to encourage the government to consider alternative means of funding the NHS … co-payments from patients should be considered.”
They are not alone: LMCs in Buckinghamshire, Scunthorpe, Worcestershire and Herefordshire claim that “denial of NHS healthcare is now so endemic, that it has become regrettably necessary to consider co-payments for NHS clinical services to re-establish adequate provision”.
Oh dear. The evidence is clear that co-payments in health are a bad idea because they are inefficient.
We already pay to use the NHS: it’s called tax. In terms of frivolous use of the NHS, we pay again in the cost of our time. Yes, the BMA is having a democratic debate, but this reminds me of Cowper’s Fifteenth Law Of Bureaucracies: with the rule-proving exception of The Wine Society, the worst thing about membership organisations is the members.