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Tory funding plans will leave NHS with £12bn deficit by 2020, analysis shows

The NHS will still face a £12bn deficit in 2020/21 under a Tory government despite the extra cash promised in the party’s manifesto, according to analysis from the Health Foundation.

The Conservative Party pledged yesterday to increase NHS funding by £8bn over five years, ‘delivering an increase in real funding per head of the population for every year of the parliament’.

While the think-tank said this will see healthcare spending increase to £128.4bn in 2020/21 - up from £123.7bn this year and £126.5bn in 2020/21 under the current budget - the NHS will still face a deficit in three years as the increased cash flow fails to help the NHS keep up its share of GDP and pressures on the service mount.

The analysis found that under these plans, NHS spending would increase annually by 1.2% on average between now and 2020/21, which is the same rate of NHS funding growth between 2009/10 and 2014/15.

This would leave NHS spending as a proportion of GDP at 7.2% by 2020/21, which is lower than where it currently sits at 7.3%. 

This is despite calls from the House of Lords’ Select Committee on the Long-Term Sustainability of the NHS to increase spending ‘at least in line with growth of GDP’

Dr Mark Porter, BMA chair, described the extra funding as 'smoke and mirrors'.

He said: 'The NHS is already at breaking point, and without the necessary investment patients will face longer delays, care will be compromised and services will struggle to keep up.'

The analysis also noted that the Office for Budget Responsibility projected that demand and cost pressures on the NHS will increase by 4% each year above inflation – a demand which, the Health Foundation says will not be matched under the Tory’s plans.

Anita Charlesworth, director of research and economics at the Health Foundation, said: ‘A projected £12bn funding gap by 2020/21 would require the NHS to continue to deliver major efficiency savings if quality and access to services are to be protected.'

She added: ‘With an ageing and growing population, new technologies and significant workforce pressures, increasing efficiency by more than 3% a year for the next five years would be very challenging.’

Readers' comments (1)

  • Vinci Ho

    The certainties and unpredictabilities of an extraordinary general election

    ''The people of England regards itself as free; but it is grossly mistaken; it is free only during the election of members of parliament. As soon as they are elected, slavery overtakes it, and it is nothing.''
    Jean-Jacques Rousseau, The Social Contract
    ..................................

    Some really long thoughts before I could write this comment. The time is about right as all parties had made pledges through their manifestos. Some critics would say these pledges are promises never to be delivered. As Rousseau alluded , an election was merely a game of politics to grant people power to dominate others . He , hence,advocated direct democracy rather than representative parliamentary politics . While I cannot totally agree but this is still a very good substance for academic debates.
    But we have extraordinary circumstances right here , right now . The EU referendum last year , by definition, was an exercise of direct democracy(though only on a single issue)which did not come often as far as political culture in the country is concerned (Scottish independence referendum was arguably only voted by people living in Scotland).
    Rather than providing solutions, this exercise of direct democracy generated more questions for us to think about our future and coming generations. A revolutionary idea always comes with prices: resignation of a fully confident prime minister , severing a long term relationship with our neighbours(people called it a divorce but that logically ,should require agreements to go separate ways from both sides!), economic uncertainties with a depreciated English pound(with pros and cons) and an early call of a general election while many people are probably exhausted mentally.
    Ironically , we need to revert back to indirect democracy and let our politicians to 'mop up' the mess made by this result of this EU referendum.
    So it goes back to the old , boring question, ' which party am I going believe?'
    If you are die hard fan, you perhaps have an easy answer(or not ??). Or if you are convinced by the media polls , the winner is too obvious even though there has been some catching up by Labour in recent days.The odds offered by the bookies are like : 6 to 1 for Corbyn to be PM , 10 to 1 for no majority win , 20 to 1 for Labour majority win and they are not interested in bets for May to be PM. Given the results of the recent local election , there should be no second guess technically and Tories should be preparing themselves for the exuberance and even
    debauchery of a landslide victory.
    So is that it?
    ................................

    ''This is the best reason to learn history: not in order to predict the future, but to free yourself of the past and imagine alternative destinies. Of course this is not total freedom – we cannot avoid being shaped by the past. But some freedom is better than none.''
    Yuval Noah Harari, Homo Deus: A Brief History of Tomorrow

    From Home Secretary to Prime Minister , May remains in the comfort zone of a technocrat , strong and stable easily . She is long way from being charismatic and visionary (at least superficially) . Denying the existence of 'Mayism' somehow shot herself in the foot when one started to compare with long serving PMs like Thatcher and Blair. In a way , one has to respect her 'honesty' because quite frankly, the Tory 'manifesto to win big majority' was stitched up by her aides. The changes in social care funding could potentially become their ' Achilles' calcaneum 'shot by Paris in the Trojan War.
    My mate Simon said ,'she does not have any children and is not qualified to be a PM!'. My take is while it is unfair to dig into personal matters , it is important to understand how our elderlies see their own as well as their children's future. There is a Chinese saying,'when there is a new policy from the top , there will be strategy to counteract from down below.' The threshold of £100,000 after which you have to pay for your social care without a ceiling (the total cost was capped at £75,000 currently, a policy from Cameron in 2013) will simply enforce old people to rethink and sell their properties to cash out and give away anything in excess of £100,000 to their children and relatives. This , of course, can generate uncertainties or even rivalries amongst family members . As GPs long enough in this business, how often did we come across similar stories when our elderly patients die? Ultimately, people would not let the State retrieve this money after death .
    One would wonder why this policy even needed to appear on the manifesto. The answer perhaps goes back to the single objective of winning a majority of seats in House of Commons so as to produce a strong and stable leadership and accordingly, would deliver a 'good' deal on Brexit negotiations. A landslide fallacy can be negated by a landslide victory. So technically, for May , she needs to win back votes from UKIP(relatively easy now) and confiscate those from Labour supporters (and the undecided). Somebody called her the 'Red Tory' and indeed ,her views on the Just About Managing (JAMs) might sound like justice. The truth is she had to succumb to her true colour with no freedom. On Brexit , she had to surrender to the far right brexiters in the government. On domestic issues , she ended up with a row with her Chancellor(rumours suggested he swore down the phone),as there was no alternative to raising tax or national insurance to solve a genuine problem of social care funding. Thanks to Cameron again with his 2015 manifesto.
    On NHS , she dared not use a different health secretary , burying the head in the sand for all the crises on going in the health service . Repeating all the rhetorics used by Cameron is the best she can do. On education , she loves the old Tory ideology of grammar school and clearly drew blood with the ex-education secretary (well entertained by the cat-fight stories about how much their pants and handbags cost!).
    May be , just may be , as Enoch Powell once said ,
    'For all prime ministers , their human flaws are inevitably amplified by the stresses in office , eventually end up as failures.'
    At least,I now do believe Auntie May is not Auntie Thatcher 2.0 , just as Uncle Trump is never Uncle Reagan 2.0.
    ..............................
    Trying to move on with lives after the local election , Labour simply produced a manifesto to 'please' . It is always easier for the oppositions if the ruling government is dogged by all sorts of contradictions. Clearly , the distraction of Brexit is perhaps so far reaching that May and her cabinet are putting more doubts in people's mind.
    But once again , history sticks(especially if people involved in the stories are still alive). Corbyn and McDonnell are both haunted by their old selves . The former cannot shake away from his affiliation with anti-nuclear campaigns and still stuttered on the question whether he would 'press the button ' in life and death crisis . The latter's faith on Marxism(he wanted to call himself socialist now) is questionable. And both were named in a The Telegraph's report(19.5.2017)about M15 opened a file on their links to IRA.
    While the prime minister and her party are willing to continue austerity on public sectors with low taxation , Labour is to open the cheque book with at least higher corporation tax . Typically, the latter wants to swing the pendulum all the way to the left with policies like nationalising the mail , rail and energy firms. Even my mother-in-law would say the answer to these is simply raising the tax. Question is how desperately have these domestic issues deteriorated over the last few years? And , yes, Brexit is once again blocking in the way as far as solutions are concerned.
    Ultimately, it is about the lives of common people. This general election cannot be just about Brexit. In fact , recent surveys suggested the 'fever' amongst voters is dying down .
    Interestingly , even The Economist published a critique on McDonnell's attachment on Marxism(13/5/2017):
    'Labour is right—Karl Marx has a lot to teach today’s politicians' While the author clearly supported a landslide victory of the conservatives,absolute capitalism will harm people and the economy. Quoted from the article:
    ''the number of listed companies has declined at a time when profits are close to their highest levels ever. Concentration is particularly pronounced in the most advanced sectors of the economy ''
    '' Average wages are still below their level before the financial crisis in 2008 and are not expected to exceed it for several years. The rise of the Uber economy threatens to turn millions of people into casual workers who eat only what they can kill.''
    The pay gap between company CEOs and ordinary workers is widening and middle class is on its way to extinction.
    Bottom line is 'do you believe a strong and stable government only for the sake of Brexit will be up for these more essential deep-seated domestic issues?' I don't have the answer.
    Confucius said ' one cannot stand if people do not trust' ,Analects. For modern politics, it is perhaps more about who and what you trust the least .

    PS : one has to excuse my relative lack of attention on Lib Dems and UKIP. The former is struggling with their mission of redemption and atonement as far as the young voters are concerned. The latter , mmmm, internal fightings with actual physical brawl ,only ex-MP went through mutiny twice and a short lady leadership of only 18 days ,tell you all about the virtues

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