The NHS crisis that none of the parties will discuss: how to pay for it

With a £30bn funding gap, all parties need to decide whether they would raise taxes, cut spending elsewhere, or impose patient charges. But don't expect them to tell us.

If there's one NHS issue that none of the parties are prepared to confront, it's that of funding. The common view is that the health service has been shielded from austerity by having its budget ring-fenced, but in reality the reverse is the case. Owing to the above-average rate of inflation in the service, the NHS requires real-terms rises just to stand still. As a recent Social Market Foundation paper noted, "A ‘flat real’ settlement for the NHS is mot what it sounds like since it is defined with reference to an irrelevant price index. To keep up with rising input costs, growing demand, and the public’s expectations for an adequate healthcare system, growth in spending on health has historically outstripped GDP growth." 

By historic standards, the NHS is undergoing austerity. Since 1950, health spending has grown at an average annual rate of 4%, but over the current Spending Review it will rise by an average of just 0.5%. As a result, in the words of the SMF, there has been "an effective cut of £16bn from the health budget in terms of what patients expect the NHS to deliver". Should the NHS receive flat real settlements for the three years from 2015-16 (as seems probable), this cut will increase to £34bn or 23%.

If they wish to avoid a significant fall in the quality and quantity of services, this government and future ones are left with three choices: to raise taxes, to cut spending elsewhere, or to impose patient charges. The third of these is proposed by the think-tank Reform today, which calls for a £10 charge for GP consultations, £10 fines for missed appointments, the introduction of a means-tested system for end of life care and an increase in prescription charges from £7.85 to £10 (with exemptions for those on low-incomes). It estimates that these measures would raise around £3bn a year, with research director Thomas Cawston commenting: "Few will want to debate higher NHS charges but the funding outlook for the service makes it unavoidable. Prescription charges are the easiest route to new revenue, with exemptions for people on low incomes built in." If this seems heretical, it's worth remembering that our "free" health service hasn't been truly free since Labour chancellor Hugh Gaitskell introduced prescription charges for glasses and dentures in his 1951 Budget (although they have now been abolished in Scotland, Wales and Northern Ireland).

But perhaps unsurprisingly, the Department of Health has responded by dismissing the idea out of hand. A spokesman said: "We have been absolutely clear that the NHS should be free at the point of use, with access based on need. That is why we have increased health spending in real terms alongside £20bn of efficiency savings to make sure the NHS continues to provide excellent care."

Labour, meanwhile, spying an opportunity to cause political mischief, has commented: "Patients will be alarmed that friends of Number 10 want to see charges for GP appointments and hospital care.

"Labour froze prescription charges before the election, but they have increased year on year under David Cameron. They are now creeping towards £10, as these plans want, and are adding to the cost of living crisis.

"The Government must come clean on any plans to charge for NHS care. They have already lost people’s trust over the crisis in A&E and thousands of axed nursing jobs – this will only add to it."

But this merely defers the question of how we will ultimately pay for a health service of the standard the public both expect and deserve. Will any party grasp this nettle before 2015? Don't count on it. 

Jeremy Hunt delivers a speech during his visit with David Cameron to the Evelina London Children's Hospital on July 5, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Leon Neal/ Getty
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“Brexit is based on racism”: Who is protesting outside the Supreme Court and what are they fighting for?

Movement for Justice is challenging the racist potential of Brexit, as the government appeals the High Court's Article 50 decision.

Protestors from the campaign group Movement for Justice are demonstrating outside the Supreme Court for the second day running. They are against the government triggering Article 50 without asking MPs, and are protesting against the Brexit vote in general. They plan to remain outside the Supreme Court for the duration of the case, as the government appeals the recent High Court ruling in favour of Parliament.

Their banners call to "STOP the scapgoating of immigrants", to "Build the movement against austerity & FOR equality", and to "Stop Brexit Fight Racism".

The group led Saturday’s march at Yarl’s Wood Immigration Detention Centre, where a crowd of over 2,000 people stood against the government’s immigration policy, and the management of the centre, which has long been under fire for claims of abuse against detainees.  

Movement for Justice, and its 50 campaigners, were in the company yesterday of people from all walks of pro and anti-Brexit life, including the hangers-on from former Ukip leader Nigel Farage’s postponed march on the Supreme Court.

Antonia Bright, one of the campaign’s lead figures, says: “It is in the interests of our fight for freedom of movement that the Supreme Court blocks May’s attempt to rush through an anti-immigrant deal.”

This sentiment is echoed by campaigners on both sides of the referendum, many of whom believe that Parliament should be involved.

Alongside refuting the royal prerogative, the group criticises the Brexit vote in general. Bright says:

“The bottom line is that Brexit represents an anti-immigrant movement. It is based on racism, so regardless of how people intended their vote, it will still be a decision that is an attack on immigration.”

A crucial concern for the group is that the terms of the agreement will set a precedent for anti-immigrant policies that will heighten aggression against ethnic communities.

This concern isn’t entirely unfounded. The National Police Chief’s Council recorded a 58 per cent spike in hate crimes in the week following the referendum. Over the course of the month, this averaged as a 41 per cent increase, compared with the same time the following year.

The subtext of Bright's statement is not only a dissatisfaction with the result of the EU referendum, but the process of the vote itself. It voices a concern heard many times since the vote that a referendum is far too simple a process for a desicion of such momentous consequences. She also draws on the gaping hole between people's voting intentions and the policy that is implemented.

This is particularly troubling when the competitive nature of multilateral bargaining allows the government to keep its cards close to its chest on critical issues such as freedom of movement and trade agreements. Bright insists that this, “is not a democratic process at all”.

“We want to positively say that there does need to be scrutiny and transparency, and an opening up of this question, not just a rushing through on the royal prerogative,” she adds. “There needs to be transparency in everything that is being negotiated and discussed in the public realm.”

For campaigners, the use of royal prerogative is a sinister symbol of the government deciding whatever it likes, without consulting Parliament or voters, during the future Brexit negotiations. A ruling in the Supreme Court in favour of a parliamentary vote would present a small but important reassurance against these fears.