Taxes 'could soar by £56bn' to fix NHS funding crisis, experts warn
3 min read
Every household in Britain could be hit with up to £2,000 in extra taxes over the next fifteen years in order to properly plug the NHS’s funding shortfall, two leading think tanks have said.
Amid growing signs of pressure on NHS services, Theresa May has vowed to grant the health service a long-term cash boost in time for its 70th birthday later this year.
In a new joint report, the independent Institute for Fiscal Studies and the Health Foundation crunched the numbers and found that NHS spending would have to rise by an average of 3.3% a year over the next fifteen years just to maintain current levels of service.
But in order to make even “modest improvements” in NHS services, the report said ministers will need to give the health service a boost of “nearer 4% a year over the medium term” and fund 5% annual increases with “in the short run”.
The report said the Treasury “would almost certainly need to increase taxes” to meet those obligations, and said it was “very hard to see” how higher spending could be funded by fresh cuts to other areas of public spending after eight years of austerity.
The experts predict that taxes would need to rise by between £34 billion and £56 billion in today’s terms - a figure they said would be equivalent to between £1,200 and £2,000 extra per household over the next decade and-a-half.
IFS director Paul Johnson said ministers now faced “one of the biggest choices in a generation”.
“If we are to have a health and social care system which meets our needs and aspirations, we will have to pay a lot more for it over the next 15 years,” he added,
“This time we won’t be able to rely on cutting spending elsewhere – we will have to pay more in tax. But it is a choice: higher taxes and a health and social care system which meets our expectations and improves over time, or taxes at current levels and a more constrained health service delivering less than we have become accustomed to."
'SLOWEST SPENDING GROWTH IN HISTORY'
Since 2010, NHS spending has risen by just 1.4% a year - far below the longer-term average rise of 3.7%. The IFS says the past eight years have seen spending on the NHS rise more slowly “than at any time in the NHS’s history”, while spending on social care has plummeted by almost 10% over the same period.
The think tank also says the NHS is “more productive now than it was in the past”, praising the service for managing to cut the length of hospital stays, treat more patients and secure faster recovery times.
Anita Charlesworth, director of research and economics at the Health Foundation, said the NHS needed “a sustained injection of funding just to get back on an even keel, let alone to modernise” after the unprecedented funding squeeze.
“Maintaining current provision and dealing with the backlog of funding problems will require NHS funding to grow by around 4% a year for the next five years,” she said.
“Meaningful progress on waiting times, staffing shortages and mental health will need growth of around 5% a year over that period. Much less than growth of 4% a year and the NHS will be able to do little more than tread water. It will struggle to fulfil Nye Bevan’s vision of 70 years ago.”
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