David Taylor-Gooby: NHS five-year plan has wide support - but how do we pay for it?

Author and Journal columnist David Taylor-Gooby says we must have an honest debate about NHS funding - and consider controversial ideas

Owen Humphreys/PA Wire The new chief executive of NHS, Simon Stevens (centre) talking to staff at at Shotley Bridge Hospital in County Durham
The new chief executive of NHS, Simon Stevens (centre) talking to staff at at Shotley Bridge Hospital in County Durham

Promises to fund the NHS featured in the election last weekend. All parties were promising to meet the targets of the NHS Five Year Forward View, and the figure £8bn has been mentioned.

I think it would be useful to look at what the Five Year Forward View sets out. The fact that all the political parties have accepted its recommendations is a triumph for the lobbying skills of the chief executive of NHS England, Simon Stevens.

I think it is fair to say that the document, the result of much debate and consultation, has the support of most of the professionals in the NHS. It sets out how the NHS must change to survive in the future.

At present the majority of NHS resources go to hospitals. The review wants much more done outside hospitals, by GPs and community services working together.

It also wants far more support from social services to reduce the number of older and vulnerable people having to go to hospital.

More resources will have to be transferred to GPs and more needs to be found for mental health (which at present accounts for 25% of illness but 13% of resources). Public health measures have to be strengthened to prevent people becoming ill in the first place.

Then there is the question of staff, and making sure they are properly paid. Cutbacks have reduced the training budgets for nurses and GPs, and it will take time to train the new ones needed.

All this has to be done if the NHS is to become fit for the future. But no one thinks it will be easy. Reorganising services is often difficult, and requires painful choices such as closing some institutions.

The actual period of change requires existing services to continue until new ones function properly, and is expensive.

If funding continues to grow only slowly, as at present, the Forward View estimates there will be a shortfall of £30bn by 2020/21. To reduce that figure to £8bn means considerable efficiencies.

Reaching the target also requires social care being able to support more people outside hospitals. Public health measures will take time to become more effective, even if we improve the present programme now. Reaching the £8bn figure will be a herculean task. It is likely to be more.

Now it is important that any financial solution for the NHS be sustainable. That means the revenue will need to keep pace with the demand. We do not want a situation where there is a one-off injection of cash into the system, and then no more until there is another crisis.

Nor is it enough simply to inject money when the government has some spare, such as the fines from the Libor rate-fixing scandal which the government recently earmarked for funding more GPs.

Of the solutions being suggested at present, the Labour Party’s has the merit of identifying revenue streams which will fund its injection of more funds. What worries me is that it may not be enough.

But in the long term there will have to be an honest debate about how revenue for the increasing demands on the NHS, as well as social care and public health, can be raised.

The recent report by Kate Barker for the Kings Fund does try to tackle the issue, particularly that of integrating social care with the NHS and removing some of the means-tested element. Her ideas involve all of us paying more.

Frank Field has suggested an increase in national insurance contributions earmarked for the NHS, to be offset against income tax once the required revenue is raised.

These ideas will be controversial, but must be debated.

It is no good simply hoping we will raise it from economic growth, and reducing other budgets, such as local government, will actually make the NHS’ position worse by reducing social care funding.

In the end there is no escaping that we will all have to pay more, in a fair and equitable way. The NHS is a challenge for us all.

  • David Taylor-Gooby is a freelance writer based in County Durham. His book, “The NHS, a challenge for us all,” is available from Searching Finance.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer