Why properly funding national healthcare means going beyond the NHS

In his spring statement last week the chancellor tried to paint a picture of the sunlit uplands that beckon beyond Brexit; a public spending dividend of billions, which will finally mark an end to a decade of austerity. Assuming some orderly way forward on Brexit is found, this summer the Treasury will kick off a spending review to map out our post-austerity, post-groundhog-day future.

This spending review has big issues to address. Not least how to ensure the health and wellbeing of the population. The 2020s will look very different to the 2010s; the ageing of society will really start to hit the public finances and inequality is on the rise again.

The demographic reality is daunting. Around 40 per cent of all public spending goes on pensions, health and social care. Over the last decade the government checked some of the spending growth by raising the pension age. The same period has seen an increase in employment among older workers. But baby boomers are starting to retire. Over the next decade fiscal pressures will really start to mount; the numbers over pension age are set to increase by 1m over the next five years alone.

Added to this, we are not ageing well. What really drives NHS demand is how healthily we age. Sadly, many more of us have long-term chronic health problems and among older people, “multi-morbidity” is increasingly the norm. All of which makes managing people’s care increasingly complex and costly. It also means that people don’t just need good hospital care, more and more need social care support to eat, wash, dress and enjoy some quality of life. This presents a major issue for the public purse—age-related spending demands are ramping up.

Services are under extreme pressure and satisfaction with the NHS has fallen sharply to reach its lowest level since 2007. The government has already promised an extra £20.5bn for NHS front line services. While the Treasury would hope this is job done and it can shift its attention elsewhere in the Spending Review, this would be wrong. The extra money failed to address social care, excluded funding to train more health care workers and provided no money for public health budgets which are targeted at keeping people healthy in the first place. Without a decent social care system, enough nurses on the front line and good prevention, the risk is that the £20.5bn is devoted to propping up a “rescue service” and public dissatisfaction grows.

Yet further cash here will eat into the chancellor’s headroom for the other public services that have seen real cuts over the last decade: funding per pupil in schools has fallen by 8 per cent since 2010, the policing budget by 20 per cent. It is unlikely that society will be better off economically or socially in the long-term if age-related spending continues to crowd out spending on these vital public services.

It’s also not clear that the nation’s health would benefit if all the money were to go on the NHS at the expense of wider public services and welfare. The public rightly cherish the principle of an NHS free at the point of use, based on need and not ability to pay. But 70 years of the NHS have shown that this is not enough to ensure that everyone has the same access to good health, with an age gap of over 18 years in healthy life expectancy at birth between people living in the least and most deprived 10 per cent of local areas in England. If anything things seems to be going backwards—life expectancy at birth for the most deprived 10 per cent of women in England has actually gone into reverse, falling slightly over the last three years. As Michael Marmot’s work for the Cameron government showed, poverty, educational opportunities and housing all shape our health and are at the root of these inequalities.

Over the last decade while public services have been under huge pressure, we shouldn’t forget the scale of cuts to working age welfare, placing pressure on some of the poorest families in the UK. Looking ahead the cuts to welfare that are still to bite—the fourth year of the benefit freeze being of most immediate significance—are predicted to lead to child poverty rising back to the heights of the mid-1990s. The chancellor has signalled he is interested in raising the minimum wage substantially, building on the already significant rises from the introduction of the National Living Wage. Doing more to tackle the UK’s low pay economy is a good thing but all the evidence suggests that a higher minimum wage will not be enough to tackle rising poverty.

The spending review should not overlook the need to provide greater support to the poorest families. Living in poverty is strongly associated with poor health. Striking the right balance between funding the immediate needs of an ageing society while investing in the long-term health of our population will be hard, but crucial to stop us storing up trouble for the future. In the end, squaring this circle will almost certainly only be possible if taxes rise but that is never an easy sell for any chancellor—perhaps the outlook isn’t quite so sunny after all.