How Badly Is The NHS Underfunded?

So the story of NHS underfunding has finally made it back into the mainstream media. It’s not like NHSpace haven’t done our bit since we were founded in 2014:

  • “Simon Stevens of NHS England will shortly be unveiling an NHS roadmap […] Looming large is the matter of the claimed £30bn funding gap, an artefact of the Tory policy to stagnate NHS funding rather than commit to real-terms growth.” – NHS England And The £30bn Funding Gap, October 2014.
  • “David Nicholson and Simon Stevens have both used their time as NHS England CEO to implement austerity measures, leading to a cumulative shortfall in funding of at least £35bn per year by 2020” – 5 Things You Should Know About STP, August 2016.

But how much money would be needed to resume normal service?

With the NHS being asked to save tens of billions each year, it’s a miracle that hospitals are only in approximately £3bn of debt right now. The ‘Nicholson challenge‘ from 2010 to 2015 demanded efficiency savings of £20bn. The ‘Stevens Challenge’ (the STPs and Five Year Forward View) is asking for another £22bn. Some of these savings come from cutting beds and staffing, resulting in the increased waiting times, rationing of care, and missed targets that we are increasingly seeing.

But some hospital execs aren’t happy making such swingeing cuts. There came a point where the cuts would go too far and lives would be at risk. This wasn’t palatable, so instead of making further cuts, those execs chose to run a deficit and put their trusts into debt. This graph shows just how common this practice has now become:

_88338474_nhs_deficit_624

Let’s assume from this graph that 2012/13 was the year that the NHS couldn’t take any more cuts. It’s also the year that the Health & Social Care Act was enacted. If we take the funding from 2012/13 (102bn for NHS England) and apply ‘NHS inflation’ of 4%, then this year’s funding should be £120bn just for the NHS to scrape by. For comparison, the 2016/17 budget is £105bn. So the NHS is currently about £15bn behind, increasing to a gap of around £35bn in 2020/21 if the government continue with their current plans.

The good news is that our NHS is truly a budget service right now, and we can afford to increase our spending.  If we were to catch up with the French, Germans, Canadians, Swiss, Japanese, etc, we’d spend about £35bn more on the NHS. The bad news is that the government, be it through ideology or deliberate maleficence, are refusing to spend that much. The great irony is that increased NHS spending would actually stimulate the economy, helping us get out of the austerity rut. We can only hope that the political choice to underfund the NHS will be overturned now that more and more professionals are speaking up.

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