Conservative conference: Government health spending queried

Health Secretary Andrew Lansley
Image caption The health secretary claimed spending would rise every year in real terms

Last night I interviewed Health Secretary Andrew Lansley live on the BBC News Channel before an audience of the Tory faithful.

I suggested to him that, because inflation was much higher than had been anticipated 18 months ago, his election promise to ring-fence health spending to ensure a modest real rise in spending (ie an increase after allowing for inflation) every year, was in jeopardy.

He insisted that health spending would still rise in real terms every year throughout this parliament.

In August, the Treasury published the latest City consensus figures for what is known as the GDP deflator, the measure of inflation that is used to determine if any rise in public spending is a "real" rise ie more than inflation.

The GDP deflator is higher now than it was when the Tories made their health spending promise.

Applying the latest estimates of the GDP deflator to projected health spending, I presented Mr Lansley with the following figures:

Health spending for financial year

  • 2010/11: £102.9bn
  • 2011/12: £102.1bn
  • 2012/13: £101.7bn
  • 2013/14: £101.7bn
  • 2014/15: £101.9bn

Based on the latest GDP deflator the best you could say about health spending is that it will be flat in real terms during the current Parliament - to be more accurate it will fall £1bn in real terms. The health secretary did not accept these calculations, and maintained that health spending would continue to rise in real terms every year.

I said we would post our figures and await his comments. Which is what I've just done!

'Better light'

PS: The GDP inflator is quite a low measure of inflation. If we'd applied the RPI to health spending, which many might think a more accurate guide to rising prices in health, then the fall in real health spending would be much more dramatic than the figures about.

PPS: I also tackled the health secretary on waiting lists. I suggested that his own department's figures showed a 20% rise in those waiting over 18 weeks for hospital treatment (up from 316,000 during last 15 months of Labour v 380,000 during first 15 months of the Tories); that those waiting over four hours in A&E during a similar period was up 73% (from 393,000 to 679,000); and the number waiting over six weeks for tests, including cancer tests, was up 186% in 12 months (3,755 in July 2010 v 10,734 in 2011).

He replied by quoting different measures showing his performance in a better light. I'm not sure if that means the figures I put to him are wrong or right: eg does he accept that more people are waiting more than 18 weeks for hospital treatment than before?

Perhaps his officials could enlighten us about that when they tackle the GDP deflator issue.

* The Andrew Neil Interview with Andrew Lansley is on BBC iPlayer.

UPDATE: I heard later on Monday from the Department of Health, and this was the statement from a spokesman:

"An increased GDP deflator has obvious implications for planned spending. However, because the baseline figure for 2010/11 turned out to be lower than planned, we are still on course to deliver a real terms increase over the life of this Parliament.

"This is a commitment that this Government is determined to meet, and it will be met."

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