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Health and social care could consume half of government spending by 2060, says think tank

Health and social care could account for half of all government spending in 50 years’ time, according to a new report published by The King’s Fund.

The report, published last week, shows how changes to the population, increases in wealth and medical advances will increase pressures to spend more on health and social care in the future. The ageing population will also be a factor although – contrary to popular perception - this is likely to drive only a small proportion of the increase.

The UK currently spends around 9 per cent of its national income on health and social care, more than twice as much as 50 years ago. This could more than double again to nearly 20 per cent by 2061, according to forecasts by the Office for Budget Responsibility. Based on projections for economic growth and current levels of taxation and government expenditure, the report estimates that this would translate to around 50 per cent of public spending.

Speaking at a King’s Fund event last week, report author Professor John Appleby, chief economist at the King’s Fund said the rise in expenditure was not ‘all gloom’.

He said: ‘There are great things we could get from spending that amount of money on health and social care – we’ll get better health and social care almost inevitably.   There will be benefits.

‘We’ve got to bear in mind the economy – and I know it’s a funny time to say this – the economy will grow. It’s pretty poor at the moment, it’s virtually flattened and seems stagnated but unless some terrible catastrophe happens my guess is that over the next 50 years the UK economy will grow in real times.’

He added the extra expenditure was affordable and the NHS sustainable – but there were choices to be made in terms of whether taxation or borrowing should rise or publicly-funded services limited.

 The report calls for an informed public debate about these choices and recommends regular reviews of spending pressures should be commissioned – like the analysis undertaken by Sir Derek Wanless for the Treasury in 2002 – to inform public debate and future spending decisions.

The report also compares the situation in the UK with that in other countries. This shows that spending on health and social care in the UK is currently around the average among industrialised nations and that other countries are facing similar pressures to spend more in the years ahead.

Professor Chris Ham, in his introduction to the report said while improvements in productivity would enable more to be ‘squeezed out’ of whatever funding is deemed to be affordable for the Government, there would still be a ‘gap’ resulting from the resources made available by government and demands arising from increasing population, rising national wealth and medical advances.

The answer to filling such a gap, he said was ‘as much political, as technical.’

Dan Wellings, head of public research at Ipsos MORI, who has facilitated workshops with the King’s Fund to debate with the public some of the choices ahead said there was a ‘visceral reaction’ when people were asked for their opinions on NHS funding.

‘The NHS comes out time and time again as the key area to protect from cuts.’

He added: ‘What’s extremely interesting is when look at satisfaction with the NHS by generation, the pre-war generation are always more satisfied with the NHS than any other generation.

‘Is it because they are conscious of a model of funding that is not the current one – is not free and available to all?’

He added that in the workshops where participants had experience of other countries health systems ‘they were so much more grateful with the NHS system.’

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