Saturday, 23 February, 2019

Government announces £20bn increase to NHS funding

Patient in hospital Image Hospitals are set to get more money from the Government
Melissa Porter | 20 June, 2018, 01:45

Theresa May is under pressure to say how plans to give the NHS an extra £384 million a week will be paid for as she prepares to deliver a key note speech on health funding.

Institute for Fiscal Studies (IFS) director Paul Johnson says the dividend doesn't exist as the United Kingdom faces a steep exit bill, much of the money that would have gone to the European Union has already been promised elsewhere, and the Office for Budget Responsibility has calculated public finances will be £15 billion a year worse off due to Brexit. "By the end of the meeting, some sources of funding had been more heavily pencilled in than others", a ministerial source said.

This translates to a 3.4% year-on-year annual funding increase, amid reports that health secretary Jeremy Hunt had asked for a 4% rise.

The Prime Minister has said that more details will be announced in due course and before the next spending review.

"We are clear that there will be an increased burden of taxation", he confirmed.

As she prepared for a major speech in London on Monday, the Prime Minister was coming under pressure to explain exactly how she will pay for the planned 3.4% increase in NHS spending.

She told Marr: "I'd certainly welcome it if we could believe it [but] how are they going to pay for it?"

"This long-term plan and historic funding boost is a fitting birthday present for our most loved institution".

"This way the vision I have set out today can benefit the whole United Kingdom".

"People are waiting longer and in pain because of Tory cuts to the NHS", he said.

On Tuesday morning, Scotland's Health Secretary Shona Robison welcomed the £2bn windfall through the Barnett formula, but claimed the announcement "really hasn't stood up well to the slightest scrutiny".

The claim was controversial because the figure of 350 million pounds did not take into account Britain's sizeable rebate or the payments that were flowing back from the European Union to Britain, so it was widely seen as overstating Britain's contribution to the bloc.

The Prime Minister said some of the extra money will from Britain's "Brexit dividend" as the United Kingdom stops sending vast sums of money to Brussels after the country quits the EU.

He long ago recognised the power that Brexit and its spurious dividend could have in securing support for a deal among his cabinet colleagues, and NHS chief executive Simon Stevens was a willing ally, raising the spectre of the £350m battle bus in his lobbying for a budget bail-out past year.

She also signalled that the NHS faces a fresh shake-up with ministers preparing to ditch David Cameron's controversial health reforms in a drive against waste and bureaucracy. "We still fund far more per head of population in Scotland than south of the border".

Spending billions of pounds is cool again.

In the past the approach has been criticised as a "stealth tax" because freezing the threshold means that more people get dragged into the higher rate as earnings rise. In return, the NHS will be expected to produce a plan, led by doctors, setting out how the money will deliver the Government's "vision" for the health service and ensure value for money.