Cutting the NHS to fund defence is bad politics and bad policy

Raiding £500m from the health and schools budgets to fund defence might please Tory MPs but the voters won't like it.

David Cameron and George Osborne have long rejected calls from figures such as Vince Cable and Liam Fox to end the protection of health spending in order to limit cuts elsewhere. But the NHS ring-fence is looking less secure today. Ahead of June's Spending Review, the Telegraph reports that Philip Hammond is in talks with the Treasury about transferring up to £500m from the health and schools budgets to reduce the expected cuts to defence. The Defence Secretary, you'll recall, has previously publicly demanded that welfare is cut again to protect the MoD. But with the Lib Dems vetoing any further cuts to welfare (bar those to pensioner benefits, which David Cameron has pledged to protect), Hammond has been forced to look elsewhere. 

Cameron has already demonstrated his willingess to raid other departments' budgets to fund defence by suggesting that aid spending could be used to meet the cost of peacekeeping and other defence-related projects. It's thought that the government would justify any decision to divert resources from health and education to defence by pointing to the hundreds of millions of pounds a year the MoD spends on health care for armed forces personnel and the education of their children. But while the move will prove popular with Tory MPs, who are furious that defence is being cut by 7.5 per cent, while aid is being increased by 37 per cent, it is likely to be judged less favourably by the public. 

As a ComRes/ITV News poll published in February showed, health and education are the two most popular spending areas, with defence trailing in sixth place (behind police and law enforcement, welfare and transport). It was partly for this reason that Cameron and Osborne chose to ring-fence the NHS and schools budgets. At last week's PMQs, Cameron made much of his commitment to protect health spending, contrasting it with Labour's decision not to pledge to do so before the 2010 election. "The right hon. Gentleman’s answer is to cut NHS spending, whereas we are investing in it," he declared. A decision to now do otherwise would offer Labour an easy political hit. 

It is also doubtful whether the NHS, which is already required to make unprecedented efficiency savings of £20bn over four years, should be cut for the purpose of reducing cuts to defence. The above-average levels of inflation in the health service mean that it requires real-term increases in spending just to stand still. But under pressure from his recalcitrant backbenchers and the National Union of Ministers, Cameron may yet give away. 

David Cameron with British soldiers based at Lashkar Gah in Helmand Province, Afghanistan. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.