The Times: Black hole in Theresa May’s cash plan for NHS18 June 2018 | 02:56 | FOCUS News Agency
The government has yet to confirm a plan for finding up to £11 billion of the money promised yesterday, with the prime minister making clear that tax rises are on the way in the autumn budget.
She said on LBC Radio that “we as a country will contribute a bit more” while government officials told The Times: “We’re going to have to have a conversation about tax.”
Mrs May announced yesterday that by 2023, the budget for NHS England will rise by £20 billion a year compared with today’s figure. On top of this, the Scottish government will be given £2 billion and Wales will receive £1.2 billion along with hundreds of millions for the health service in Northern Ireland.
In a surprise additional boost, a further £1.25 billion will be allocated each year to relieve NHS pension deficits. The deal was concluded late on Friday afternoon by Mrs May, Jeremy Hunt, the health secretary, Philip Hammond, the chancellor, and Simon Stevens, chief executive of NHS England. However, sources said that the meeting broke up without agreement on where significant chunks of cash would come from. “By the end of the meeting, some sources of funding had been more heavily pencilled in than others,” a ministerial source said.
Plans to raise money from freezing all personal allowance and national insurance thresholds at the end of the parliament, revealed in The Times last week, remain leading options and would raise nearly £4 billion. Borrowing could account for £8 billion to £10 billion.
Plans put forward to defer corporation tax rate cuts, delivering £6 billion, were not signed off. Ministers now hope that the Office for Budget Responsibility will upgrade growth in the budget, reducing the necessary borrowing and tax rises, but the plans remain underfunded by up to £11 billion.
Mrs May said that the measures would be partly funded by a “Brexit dividend” — the money Britain will no longer send to Brussels.
However, economists such as Paul Johnson, of the Institute for Fiscal Studies, dismissed her claim, saying this would be wiped out by slower growth and lower tax revenues. Sarah Wollaston, the Tory chairwoman of the health select committee, branded the prime minister’s claim “tosh”. The spending will also squeeze other departments hoping for cash from the Treasury.
The announcement, being confirmed in a speech today, will mean that NHS funding in England will rise in real terms by £394 million a week by 2023, more than the £350 million promised by the Vote Leave campaign in the referendum.
Boris Johnson, the foreign secretary, who has campaigned in government for the cash, said on Twitter: “Fantastic news on NHS funding — a down payment on the cash we will soon get back from our EU payments.”
Sources have told The Times that Brexiteers will face difficult concessions, both before and after the European Council meeting this month.
A Downing Street source said that it was right to tell the NHS about new funding, which will be available from next April, while making decisions on tax and borrowing at the next budget.
The deal also includes a promise of a bill to help Mr Stevens to unwind some of the reforms to create hundreds of “clinical commissioning groups” introduced by Lord Lansley as health secretary, which make it hard to keep track of NHS costs. Social care budgets will be examined in the next spending review.
Campaigners warned that the funding settlement, an average of 3.4 per cent a year for NHS England, was not enough. Ms Wollaston added: “I welcome the uplift but this will not deliver as planned without attention to and uplifts for public health [prevention], social care, workforce training and capital/ transformation budgets”.
Chris Ham, chief executive of the King’s Fund, a think tank, said the sum did not “provide [a] long-term cure”.
The budget increase is higher in the first two years of the five-year settlement, with NHS England getting a 3.65 per cent increase in 2019 and 2020, before dropping to 3.1 per cent for 2021 and 2022, well below the 4 per cent hoped for by the NHS.
Labour refused to say whether the Tories were offering more money than it was. Emily Thornberry, the shadow foreign secretary, said: “Let’s see what they actually deliver.”
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