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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.’