Is the 3.4% spending increase enough to 'save' the NHS?

Maria Goddard, University of York 

The good news is that the NHS has received a 70th “birthday gift” in the form of a 3.4% per year increase in real spending over the next five years. The bad news is that, although this may be enough to fight the current battle, it may not be enough to win the war against rising pressures on the NHS.

The planned expenditure, announced by Theresa May, the prime minister, on the BBC’s Andrew Marr Show, amounts to an extra £20.5 billion over the period up to 2023-24, which is actually not remarkable in terms of historical trends. Average annual increases in spending on the NHS since it was founded in 1948 have been around 3.7% – so 0.3% higher than the current proposed annual increment.

There are some concerns that the increase is based only on the money received by one part of the system – NHS England – which is responsible for spending on the day-to-day running of the NHS, but not for public health, training and infrastructure, such as buildings and IT systems. (The health services of Scotland, Wales and Northern Ireland are governed by their respective governments and have separate budgets.) But, compared with more recent spending decisions that have seen annual increases for the NHS dip as low as just over 1% and commitments that are made only year to year, it can be viewed as an important settlement, especially in the light of funding constraints faced in other parts of the public sector, such as education.

A question seldom answered

Whether or not the settlement is “enough” to meet the NHS’s needs is a question that has been asked repeatedly – and less often answered – by many reports, reviews and independent and government committees. In the past few years, however, this has come to the very top of the political agenda and to the attention of the general public, who are the ultimate funders of the NHS via the taxes that they pay.

A crucial element in deciding how much is “enough” is to understand the pressures and demands that the NHS has to meet. People live longer than ever before – and the proportion of the population living over 65 years of age has more than tripled since the NHS was founded, including steep increases in those considered to be very old (85+). Unfortunately, not all the additional years of life we now experience are lived in good health. On average, from the age of 65, men will spend 8.2 years and women 9.9 years in poor health. And there are large differences between the richest and poorest areas of the country.

Although the NHS has helped reduce deaths and illness from some causes, other conditions – such as dementia – have increased significantly as people live longer.

The increasing needs of a growing and an ageing population puts pressure on the NHS. It is estimated that after adjusting for these changes in the population, spending has risen by only 0.1% per year since 2009-10, in real terms, leaving the NHS and its workforce struggling to meet demand.

An increase in NHS spending of at least 4% over 15 years is needed to make up for many years of under-funding and to make the NHS fit for the future. The planned 3.4% increase is only just enough to maintain the status quo.

Where will the money be spent?

The government says the spending will be accompanied by a ten-year plan, and has indicated that cancer and mental health are priority areas, along with more doctors and nurses. No one could argue with these intentions – but the reality may differ, given that the money is only a fraction above the 3.3% estimated to be needed to keep the NHS at current standards.

It is not enough money to ensure that the mental health needs of the population are treated with the same attention as physical health needs. It is not enough money to ensure that cancer survival rates improve to be on a par with many other European countries. And it is not enough money to address staff shortages in primary care and hospitals. It is probably just enough money to patch up the parts of the NHS that are under most pressure.

Significant progress needs longer-term and broader approaches. One example is investing to improve health rather than just healthcare – tackling some of the risks associated with poor diets, smoking, excessive alcohol consumption and lack of physical activity – lifestyle factors that underpin many of the chronic diseases in the population. But these are not short-term fixes, as the effect of actions taken now will be seen over generations rather than over the average politician’s horizon.

Identifying effective policies that don’t widen existing health inequalities is also a challenge. The fact that the budget for public health has been squeezed rather than expanded over recent years – and that this most recent settlement excludes public health – does not bode well.

Bigger picture thinking needed

It is also not enough to consider spending on the NHS in isolation. Factors such as education, housing and income have an enormous influence, not only on health but also on the ability of people to follow healthy lifestyles – but these sit outside the direct control of the NHS.

Social care also has a major role to play in supporting the needs of a growing and ageing population. But, again, spending has not kept up with demand.

Public spending has fallen since 2009 and as a result spending in England on adult social services per adult has reduced by 13.5% over this period. As the health and social care systems interact so closely, pressures in one sector will have a knock-on effect in the other, and there are repeated calls for a more integrated approach to both funding and provision across the two sectors.

The NHS will undoubtedly benefit from the 3.4% spending increase – and it will help to prevent further deterioration of a service that the public are extremely proud of – but it is not a long-term solution to making the NHS fit for the future.

Maria Goddard, Professor of Health Economics, University of York

This article was originally published on The Conversation.