Ugly background to looming NHS crisis

The government is facing a huge challenge to plug the widening hole in the NHS budget. Emily Hohler reports.

At this year's party conferences, all political parties have been eager to inform voters that the NHS is "safe in their hands", says The Daily Telegraph. Labour and the Liberal Democrats both promised billions in extra funding, paid for by taxes on the rich. The Tories insist they will not just ring-fence the health budget, but increase it.

The consensus will only be reinforced by this week's joint letter from the country's leading medical bodies to the party leaders, warning that the health service is "buckling under the twin crises of rising demand and flatlining budgets". What's more, the medics warn that things are set to get worse, with a £30bn funding "blackhole" expected by 2020.

All this needs to be set against the "ugly" background of UK borrowing and debt, says Chris Giles in the FT. The message of the prime minister and the other political parties was easier to sell thanks to the introduction of new accounting measures, and the inclusion of an extra year, 2019-2020, into the public finance plans.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

These measures caused the headline borrowing number to fall, although the underlying health of our public finances is unchanged. In fact, Britain still has one of the worst deficits in the world, at £95bn, or 5.5% of national income. Income tax revenue is falling short of forecasts, and it is not clear where the next spending cuts will come from.

Moreover, the Institute for Fiscal Studies thinks that the cuts will have to exceed the £25bn figure that David Cameron has touted. It will be very hard to deliver cuts of that size, given that many government departments have already implemented real-terms budget cuts of 30%.

The depressing reality is that even if the parties' planned cash injections take place, they still won't be enough to enable the politicians to "deliver on their promises" for the NHS, says Zara Aziz in The Guardian. And, given the existing "workforce crisis" in the NHS, Cameron's pledge on seven-day-a-week access to GPs is "astonishing".

That said, extra cash isn't the only way to improve the quality of care in the NHS, argues Andrew Haldenby in The Daily Telegraph. "Good care can cost less."

In Jersey, postmen are working with the NHS and the local council to check on vulnerable people and avoid ferrying them to expensive hospitals; in Cornwall and the Scilly Isles, fitness programmes for the elderly have cut hospital admissions by 25%.

Visiting a pioneering hospital in the USearlier this year, the health secretary, Jeremy Hunt, said its zero tolerance approach to errors had benefited patients and saved $15m. Other public services are "coping with lower budgets extremely well". Crime is falling despite a 25% cut to the police budget in real terms.

Polls suggest most people agree the NHS needs reform more than extra money, and don't want to pay more tax to fund it. Politicians need to have the courage to face down the "vested interests within the health system".

Emily Hohler

Emily has extensive experience in the world of journalism. She has worked on MoneyWeek for more than 20 years as a former assistant editor and writer. Emily has previously worked on titles including The Times as a Deputy Features Editor, Commissioning Editor at The Independent Sunday Review, The Daily Telegraph, and she spent three years at women's lifestyle magazine Marie Claire as a features writer for three years, early on in her career. 

On MoneyWeek, Emily’s coverage includes Brexit and global markets such as Russia and China. Aside from her writing, Emily is a Nutritional Therapist and she runs her own business called Root Branch Nutrition in Oxfordshire, where she offers consultations and workshops on nutrition and health.