The arrival of a new Secretary of State for Health and Social Care in England is a timely opportunity for a bold new start, based on the funding commitment achieved by his predecessor, writes Tony Hockley. He offers his perspective on this recent development.
As the UK celebrates 70 years of its National Health Service, helped along by another £20bn of tax funding, people up and down the country are making declarations of institutional love for this public service. They do so with a passion that seems strangely lacking in every other country with a universal, comprehensive health system. This is strange given the relatively poor outcomes achieved under the UK system: the “warts-and-all” sort of love.
Aside from the high emotion that survival to 70 has invoked, it is worth asking if the decades ahead might be different to those that have passed. Could the volatility of tax-funding be corrected and replaced with the steady but low rates of spending growth seen elsewhere, closer associated with rate of economic growth? The commitment to an average of 3.4% over the next five years does not bode well for investment in the other public services that actually improve health rather than treat the consequences of ill-health.
What is the plan for the NHS at 70? More of the same, and the NHS taking an ever-greater share of total public spending? Or the usual, expensive, and dangerous rollercoaster of feast and famine that seems the price of funding that comes almost exclusively from general taxation? A birthday may be a time for celebration, but it is also a time to look forward. Those who really care for our health system must hope that the future does not resemble the crisis-ridden past. These financial and organisational troubles were also born in 1948. Change must happen.
Jeremy Hunt played a very difficult hand superbly. He came to the job to pick up the pieces from Andrew Lansley’s complex reforms, which were intended to “liberate” the NHS, but actually tied it in statutory knots. Hunt came free of Lansley’s considerable prior knowledge, allowing him to focus on what most needed attention from the perspective of patients; this included embedding new cultures on safety, transparency, and mental health. He has stuck doggedly to his patient-centred agenda. He also stuck doggedly to the need to make progress in modernising the doctors’ training contract, despite one of the BMA’s most furious campaigns since the government introduced prescribing controls in the early 1980s.
There comes a time, however, when every health minister has become too much of an insider to continue to be effective. As Lansley demonstrated, and as Virginia Bottomley also showed, expertise can become a serious problem. Concern for the detail and for working relationships with the many partners in the health system limits the capacity to make a difference. In the end, every health secretary becomes a large part of the problem, having been built up as a hate figure by union leaders, and it is a rare luxury to bow out with their head held high. Hunt’s legacy for Matt Hancock is extraordinary given the current economic climate. The former Chief Executive of the NHS, Sir David Nicholson, argued on Twitter that: “I do not believe that any other of the Secretaries of State that I have worked for could have got more out of the treasury that @Jeremy_Hunt has … longevity has its benefits”.
Having achieved this commitment to steady funding, compared to a history of volatility, and ahead of both the NHS England proposals on how to spend it, and the green paper on social care, the time was ripe for a fresh face at the Department of Health and Social Care. The NHS needs a new critical friend, as does the taxpayer and patient. Given the extra funding, this will be one of the most important roles for the remainder of this parliamentary term. The Health Secretary must have the full confidence and support of both the Treasury and Downing Street, in order to be able to stand up to the constant pressure from the NHS lobby for cash as the solution to every question and to properly tie the funding commitment to fundamental change.
Matt Hancock has three principal challenges:
- To shift the health and social care system from expensive hospitalisation and institutional care, and into the community: finally turning a poorly-performing treatment service into an excellent health service;
- To deliver the digital revolution that Jeremy Hunt committed to in his first days at Health, but which largely fell by the wayside amidst other concerns;
- Rooting out endemic inefficiencies; running the risk that improved funding will once again entrench current practice rather than foster change.
If he can address these with the determination that Jeremy Hunt has promoted a culture of patient safety, then the funding boost will have secured lasting change and perhaps an NHS that is sustainable for the next 70 years.
Tony Hockley is Visiting Senior Fellow in the LSE’s Department of Social Policy, and Director of LSE’s Policy Analysis Centre. He was previously Special Adviser to Virginia Bottomley and to Stephen Dorrell in the Department of Health.
All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Pixabay (Public Domain).
“Another £20 billion of tax funding [for the NHS]”
Well, yes and no.
I know “£20 billion increase in NHS spending” is the figure which the government is hoping will stick in the public’s mind but it’s not as simple as their spin doctors would have us believe.
I’ve posted this analysis before on this website.
Let’s begin with the simplifying assumption that inflation falls to zero for the next six years.
Under the government’s plans, the present annual £115 million budget of NHS England would rise by 3.4% each year, starting in 2019-20, until it had reached £135 billion—a £20 billion increase—by 2023-24.
Why did the Conservatives chose £20 billion for the increase? Well, it’s an easy number to remember and it works out to be £385 million per week, which is bigger than the £350 million figure on the side of the Brexit bus.
Incidentally, in the year before 2023-24, the increase is £16.5 billion, which is £317 million per week and does not meet the Brexit bus target. In other words the £385 million a week is not coming soon.
Inflation will not, of course, fall to zero: the Consumer and Prices Index (CPI) is currently running at around 2.5% per year. (The CPI is always lower than the RPI which is why the Conservative prefer it.)
Theresa May is pledging that spending—in cash terms, not real terms—on the NHS will have increased by £600 million per week in 2023-24 (that’s £31 billion for the year).
So it would seem that the Conservatives are planning on raising spending on the NHS by 4.9% per year to offset the reduced spending power that inflation causes.
(According to the plan £31 billion will have the same spending power in 2023 as the £20 billion has now.)
However if you take an inflation rate of 2.5% from 4.9% you’re left with 2.4% and this is somewhat less than the 3.4% which is the figure we’re all supposed to remember about the increase. To get a 3.4% rise you need inflation to fall to 1.5% per year.
The NHS since it was first formed in 1948 has had average annual rises in its budget of about 3.8% in real terms.
So let’s hope, as I supposed earlier, that inflation heads downwards from its present value and stays down for five years.