NHS to get £4bn a year in Brexit dividend
May promises extra health service funding from tax, borrowing and EU savings
THERESA MAY is poised to give the NHS a £4billion-a-year boost funded by borrowing, income tax and a Brexit dividend, The Daily Telegraph has learnt.
The Prime Minister is on Monday expected to announce that she will raise NHS funding by around 3 per cent a year as part of a “multi-year” settlement to mark its 70th anniversary.
She is expected to say that the rise will be funded in part by a “Brexit dividend” – the billions of pounds the UK would otherwise be paying to the EU.
Ministers are also considering freezing the thresholds for the personal allowance, the rate at which people start paying income tax, and the threshold for the 40p rate from April 2020.
In the past the approach has been criticised as a “stealth tax” because freezing the threshold means that more people are dragged into the higher rate as earnings rise. It has been estimated that the measure could raise almost £4billion by the end of this Parliament.
The announcement comes as Ian Cumming, the head of the NHS’S staffing body, said the health service must get better at retaining GPS. He released figures revealing four in 10 quit the NHS within five years of finishing their training, at a cost to the taxpayer of £500,000 each. A government source said the measure, which had been proposed by the Treasury, was still under “live” discussion. In public, Simon Stevens, the head of the health service, has avoided making any plea for funding, on Wednesday telling an NHS conference that the topic was now too “sensitive” to broach. But in a private debate with students this week, he said that a rise of between 3.5 and 4 per cent was required to ensure the NHS could cope.
Mr Stevens said funding growth for the NHS had been “highly constrained” for the last eight years, as a result of the 2008 economic crash. Since then, average growth has been 1.4 per cent a year, compared with average annual rises of 3.7 per cent over the past 70 years.
He said the squeeze in the past five years had hit particularly hard.
“If we had over the last five years received the same levels of annual funding growth that we had over the rest of our history, then cumulatively we would have had about £27 billion more to spend on the NHS over those five years, and right now we would be spending £8.8billion more than we are,” he told the Oxford Union. He made a detailed case for a long-term increase in NHS funding, saying he was “hopeful” that the Prime Minister would act.
“I am personally accountable to parliament … and the fact is, if we want to continue with a responsive, well-functioning National Health Service, then we are going to have to see funding returned closer to what the historic fund- ing growth has been, which has been more at 3.5 to 4 per cent,” he said.
“I am hopeful that as we approach the 70th birthday on July 5, the Prime Minister’s commitment to a funding settlement for the NHS … will help with some of these financial pressures.”
The average rise of 1.4 per cent would amount to an extra £1.8billion, while a 4 per cent rise would mean an extra £5.1billion in the first year of a new settlement. Yesterday Jeremy Hunt said discussions with the Treasury over the size of the settlement were “difficult but ongoing” – saying the Prime Minister’s
commitment to health should never be doubted. He said any funding boost would include “simple bold goals” – including making cancer survival and maternity standards the best in Europe.
The Health and Social Care Secretary also said future strategies would ensure health and social care services were “completely joined up”.
Speaking at the NHS Confederation conference in Manchester, he said: “We have to acknowledge that cuts to the social care system have had a pro- found impact on the NHS,” Mr Hunt said, saying a “transformation” of the sector was now required.
It came as new figures showed more than half a million people have waited more than 18 weeks to start NHS treatment. The statistics for April show 500,068 patients waited more than 18 weeks, the highest figure since August 2008 when 520,000 people were waiting 18 weeks or more. Earlier this week, polling by Ipsos MORI found that 77 per cent of adults supported a 4 per cent annual funding boost over the next 15 years. The survey commissioned by the NHS Confederation found 45 per cent backed increases in national insurance to fund the changes.
The NHS funding announcement is due to be followed by a government Green Paper on how to fund long-term care of the elderly. Today a report by Lord Darzi, a former health minister, calls for social care to be free at the point of need for anyone with “critical” or “substantial” needs. The report for the Institute of Public Policy Research also calls for NHS reforms to streamline its bureaucracy.