NHS funding: is the government breaking its promise?
“Andrew Lansley needs to come clean and explain to the public why the 
government has broken the promises it made on the NHS – promises that were at the heart of the Tory election, central to the Coalition Agreement and repeated at the Spending Review.”
John Healey MP, Labour’s Shadow Health Secretary, 8 December 2010
Cathy Newman checks it out:
The Conservative pledge to protect the NHS from spending cuts was totemic – proof, David Cameron said repeatedly, that the Tories had changed. The Conservatives vowed to “guarantee” to increase health spending each year in real terms – that is once inflation was taken into account. October’s spending review seemed to deliver on that promise – just.
While multi-billion pound axes fell on other departments, NHS budgets were pencilled in to edge up by 0.1 per cent a year. But there’s a catch. If prices go up quicker than forecast, that 0.1 per cent real-terms increase – which leaves little room for error – would quickly be wiped out. (We examined this before.)
And now, just weeks later, new inflation figures already cast doubt on the rise. Labour is accusing the government of breaking its promise – are they right?
The analysis
According to the latest predictions from the Office for Budget Responsibility, NHS spending is facing a real-terms cut. In today’s money, the NHS will have around £260m less a year to play with by 2014/15.
When challenged on this yesterday in parliament, health secretary Andrew Lansley insisted the government was sticking to its commitment to protect the NHS.
“The spending review gave a real-terms increase in NHS funding,” he said. “That was the commitment we gave and it was set out in the spending review, and it remains true that revenue funding for the NHS continues to rise in real terms”.
So does that mean he’ll throw a bit of extra cash towards health to keep pace with any unexpected inflation rises?
A Whitehall source pointed out that inflation forecasts are variable and will change again in the future.
Cathy Newman’s verdict
Although the NHS budget hasn’t changed since October’s spending review, the latest inflation figures suggest that prices will increase more quickly than expected.
When this rise in inflation is taken into account, what looked like a tiny real-terms rise in NHS spending now looks like a tiny real-terms cut. So if the government wants to make its pledge of increased spending a reality, it will need to pump more money into the NHS. So far there’s no sign of them doing this.
These inflation figures are, however, just predictions at present. The next forecast could swing back the other way, leaving the NHS better off than expected.
It may be a slight exaggeration to claim, as John Healey did, that the government “has broken” its promises but it certainly will do if prices rise as predicted.
There are 5 comments on this post
Do you really still need to put a claret blush on the conclusions?
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Cathy,
The Tories will NEVER ask the British people if they want to abolish our free-at-point-of-use National Health System in favour of the American ripoff system. They have opposed every social advance our country has ever made, and the same was true at the founding of the NHS.
The latest sophist juggling with figures is merely another illustration of the “salami method” employed to avoid principled debate – they know they would lose out massively. This method is war by attrition, in which funds and systems are gradually reduced to destabilise the system and leave it open to organised propaganda attacks by ultra right wing media.
Aneurin Bevan, founder of the NHS, knew very well how much of an enemy of decency is the Tory Party. He not only expressed his contempt for them, he warned how future attacks would be mounted. He was exactly right.
Allow the Tories to continue their cowardly method unchallenged and eventually we will be treated to the edifying spectacle of a prone street casualty being searched, Yank “style”, for credit cards by a privatised ambulance crew.
And if Thatcher’s “the NHS is safe in our hands” was true, why did she need to say it?
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Andrew Lansley is quietly following through all the templates organised by the Conservatives during their time in opposition.
American companies, struggling to survive in America, are making hay at the expense of the NHS – which is TAX-PAYER funded.
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[...] nights Channel 4 analysis of NHS funding using the latest predictions from the Office for Budget Responsibility has [...]
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A factor you have not taken into account is that inflation in the healthcare sector is always higher than the general inflation rate, so irrespective of future forecasts, the slim 0.1% annual increase in the budget will no way cover for that.
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