UK Politics

NHS spending 'to fall as share of GDP by 2020'

Hospital Ward Image copyright Science Photo Library

David Cameron is likely to preside over the largest sustained fall in NHS spending as a share of GDP since 1951, an analysis by the King's Fund says.

The health think tank told the BBC the decade to 2020 would see the longest reduction in the share of the economy devoted to health spending since the middle of the last century.

Meanwhile, an NHS trust head suggested charges might need to be introduced.

The government ruled this out and said it would invest £10bn by 2020.

The King's Fund analysis says: "The 10 years up to 2020-21 are likely to see the largest sustained fall in NHS spending as a share of GDP in any period since 1951."

Image copyright King's Fund
Image caption A graph from the King's Fund's analysis shows a fall in NHS spending as a share of the economy

Speaking to BBC Radio 4's PM programme, its economist John Appleby said: "If we go back to the early 1950s we were spending something like 3% of GDP on the NHS and that went up to a high of nearly 8% of GDP in about 2009.

"Since then, austerity, government decisions about funding the NHS, has meant that as a share of GDP what we devote to the NHS has started to decline."

The Conservatives have promised to raise spending on the NHS above inflation at the last two elections, and have kept the promise. They have pledged an additional £2bn this year, and an extra £8bn before the election.

But the share of the economy devoted to health is set to shrink by between 0.7 and 1 percentage point between 2009 and 2020, said Mr Appleby, taking the figure back to the level last seen in 2008.

'Serious question'

He cited OECD research showing the UK had slipped down the international league table of health spending on this basis, falling behind Iceland, Slovenia and Finland.

The figures were calculated UK-wide. The vast majority of NHS spending - around 83% - takes place in England.

Some in government privately accuse the King's Fund of lobbying for extra health spending, a charge the think tank rejects.

The chief executive of the Dartford and Gravesham NHS Trust Susan Acott told PM the current model for funding the NHS could be under threat if health reforms failed.

She suggested extra charges might need to be levied for healthcare in future.

Ms Acott said: "Either the income has got to go up and the efficiency has got to increase and there has to be a serious public health issue as the Simon Stevens plan suggests.

"But if all of those three parts aren't fully implemented and given the complete focus and energy that they'll need, then I think we have a serious question to ask about whether the system that we know and love can continue in a tax funding - free-at-the-point-of-use - model."

'Pay attention'

Simon Stevens is the head of NHS England and has published a five-year plan for the service which included £22bn in efficiency savings and different ways of working, keeping people out of hospital where possible.

Ms Acott added: "If people aren't prepared to pay through their taxes they will end up having to pay through some kind of co-payment system or personal insurance so they have a choice to make and I think they better pay attention to the debate that's going on."

A spokesman for the Department of Health said: "We are committed to the NHS and its values, so we've committed to investing £10bn this Parliament to fund the NHS's own plan for the future.

"The NHS must play its part in delivering efficiencies - we're taking action to help hospitals clamp down on rip-off staffing agencies and cut spending on management consultants."

The department made clear it would rule out new charges or personal insurance.

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