The countdown to the 70th anniversary of the NHS gets ever nearer. For many, it will be a moment to reflect on the achievements of an institution which many voters regard as a national treasure. The celebrations are also expected to feature more details of the Government’s commitment for a new long-term funding settlement for the health service. How this will look remains unclear, although it is expected that longer term, 'multi-year' funding settlements will replace annual budgets, allowing the NHS to better plan for a more sustainable future to cope with rising demand.

Hints from the Prime Minister that this new plan is coming have been unanimously welcomed, particularly as many core services across primary and secondary care appear to be at breaking point. For instance, the Government’s plan to increase the number of GPs looks increasingly unrealistic as new research shows that 9 per cent of GPs now plan to quit in the next five years. Furthermore, NHS trusts in England this week reported a combined financial deficit that was nearly twice the amount planned. A recent joint report by the independent Institute for Fiscal Studies and the Health Foundation found that NHS spending would have to rise by an average of 3.3 per cent a year over the next fifteen years just to maintain current levels of service. The need for a long-term funding solution to address these problems is therefore entirely necessary. 

Successful Brexit = Higher health spending

One way in which the spending increase could be delivered is through tax rises. Public opinion appears to be accepting of the necessity for such a measure. 
The British Social Attitudes survey undertaken in late 2017 revealed an increase in the support for a tax hike from 41 to 61 per cent. This sentiment was again identified in February 2018 through a survey by the think tank Reform. It found that 59 per cent of adults would be willing to pay higher income tax to fund more spending on the NHS. This was an increase from 33 per cent in August 2014. 

For many voters, the commitment of extra NHS funding is very much a central component of what Brexit means. The infamous Vote Leave bus pledge for an extra £350 million per week to the NHS swayed many undecided voters to support the leave campaign. It is also demonstrated the attachment which many have towards the sustainability of the institution. It is worth remembering that the leading proponents of this pledge are same Tory brexiteers whom now have the responsibility for delivering Britain’s departure from the EU. Whilst controversial at the time, the memory of this pledge lingers on, and the Tories will be under no illusion that failure to deliver on it after Britain leaves the EU will harm the Party in years to come.  

A more fiscally-relaxed Conservative Party?

The commitment for increased spending marks a departure in the Conservatives’ stance toward the need for fiscal restraint. It also signals a move away from the rigid ideological commitment to austerity that has characterised both the Cameron and May administrations for the past eight years. For example, this week one of the Party’s future leadership prospects, Ruth Davidson, called on the Conservatives to choose higher spending over tax cuts: 

“The UK Government has a choice to make. And, if that choice is between extra spending on the NHS or introducing further tax breaks beyond those already promised, I choose the NHS.”

This is a point which has also been echoed in recent months by Jeremy Hunt, Boris Johnson and Michael Gove. Whilst this sudden commitment to increased taxes may not be indicative of an end to austerity outright, it represents an acknowledgement by many Tories that the wider political context has changed.

Divisions are already appearing between the fiscally-conservative, pragmatic Chancellor and those in the Cabinet who favour inflation-busting increases in NHS spending. The idea favoured by Jeremy Hunt of a ‘hypothecated tax’ has already been rejected by the Treasury, and is just one in a series of divisions between the Chancellor and his colleagues whom favour greater spending commitments. Continued resistance from Philip Hammond is likely to isolate his position further, particularly considering that he is already at loggerheads with Brexiteer Cabinet members who resent his stance of a pursuing a softer Brexit. 

At a time when the Tories recognise the fragility of their parliamentary position and the need to define the Party beyond solely delivering Brexit, solving the NHS’ long-term financial problems could be the answer.

The politics of the Government’s NHS long-term funding settlement