Although an increase in funding for the NHS is welcome, projected spending still remains below what the BMA and many policy experts believe is needed. The following sets out three examples of how this funding falls short of what is needed to ensure the NHS can keep up with rising patient need.
The announcement is less than the long running average growth in health spending in the UK. For example, The Health Foundation has found that the average annual growth in the overall health budget between 1948/49 and 2016/17 was 3.7%.
For comparison, average funding growth in health spending under the Thatcher and Major governments was 3.3%. This increased to 6% under the Blair and Brown governments. This latest funding uplift means that NHS funding is growing at an average rate of 2.7% over this government, 1% below the long term average.
Assessment of growing patient need
Leading health policy think tanks have reported that the NHS will need around a 4% real terms annual increase in order to be sustainable. For example, the Institute for Fiscal Studies and The Health Foundation have developed analysis that states that in order to maintain quality and access to care at current levels the overall health budget for England would need an extra 3.3% funding over the next 15 years. However, improving the quality and range of care provided would require an increase in spending at a faster rate – growing by 4.1% annually over the next 15 years.
This is due to growing patient need and increased costs with, for example, the number of people living with one or more chronic conditions significantly rising.
Increasing total health funding by an annual 4.1% will help ensure the NHS in England is able to meet waiting times targets for A&E and inpatient care, deliver parity of esteem for mental health and invest in modern technology and facilities.
The UK currently spends less on health as a proportion of GDP than many other leading EU countries. The latest OECD data shows that in 2017 the UK spent 9.7% GDP on health, whereas the leading EU countries spent an average of 10.1%. Although the new NHS funding will go some way to bridging this gap, the UK will still spend less than these leading EU countries.
Based on the new real terms funding for NHS England, and assuming no growth in the rest of the health budget in England, we predict that total UK health spending will reach £231.2 billion by 2023/24. This includes government health spending of £186 billion and private health spending of £45.2 billion by 2023/24. However, to bring us in line with leading EU economies, the UK governments would have to spend an extra £3.1 billion by this time. This would bring total UK health spend to £234.3 billion by 2023/24.
Individual leading EU countries such as France and Germany spend significantly more on health than the UK. For example, in 2017 Germany spent 11.3% GDP on health, compared to the UK’s 9.7%. Assuming that Germany continues to spend this proportion of GDP on health, the gap between UK and Germany’s health spend would reach £31 billion by 2023/24. However, as the proportion of GDP that Germany is spending on health has increased (e.g. 10.9% in 2013 to 11.3% in 2017), it is likely to continue to increase and therefore increase the gap with the UK even further.