The NHS needs a reliable source of income. Here’s where to find it.
Our NHS is nearly 70 years old and hasn’t changed its model for
delivering services sufficiently to meet the changes in demography, complex
disease profiles and user expectations. Even more efficient working and collaboration
with adult social care would not resolve the problem that a tax-funded,
pooled-risk healthcare system such as the NHS that is free at the point of
clinical need requires a more generous funding system than we currently provide
or are contemplating.
Yes, we need to use more technology, integrate health and social care with
more provision in the community, and train and employ more doctors and nurses.
We also need to tackle the huge variation in cost and quality of care around
the country.
But this all takes time and requires both capital and revenue
investment. The predicted unrelenting increase in demand that the health and
care system will face over the next two decades would require in the region of
a 3-4% annual real-terms increase in funding. (More than the 1.5% increase since
2010 and the 10 to 15% reduction in adult social care spend over the same
period.)
Future funding of the gap needs to be from continuous sources. The top
10% of earners pay 59% of total income tax receipts, the top 1% some 27% - this
source is unlikely to release the funds needed. Sourcing new revenue should be
based on the following principles. A new tax base for the gig economy, the older
population should pay a fairer share of the costs, lifestyles costly to the NHS
and care system should exact a premium and tax-reduction schemes should be
tackled.
A) A 10% revenue tax on UK sales for Amazon, Google, eBay and Apple (who pay very
little tax) would yield £2.4bn minimally, with tax rising in parallel with
their growth.
B) Three hundred thousand retired people receiving a pension are higher
rate taxpayers, so relatively well-off. If they did not receive basic state
pension or winter fuel allowance, £1.95bn a year would be generated annually,
which would also be index linked.
C) Overseas companies own £55 billion of UK property. A 5% tax on land
registry value would gain £2.75 billion and could be inflation proofed. A
higher tax on sugary drinks (20%), minimum alcohol pricing, and higher rate VAT
for unhealthy food (definitions exist) could raise a further £1-2bn a year.
Collectively the suggestions would deliver £8.5bn a year recurrently.
Other revenue sources could include revamping inheritance tax, which is
likely to bias revenue from wealthier people and those who have been higher
users of the care system.
What happens if we do nothing? Winter pressures become all-year
pressures. Access to care deteriorates. Premature death rates rise among both
young and old. We slide down the international league tables in terms of
healthcare performance. More staff leave the NHS and young people stop going
into the UK healthcare professions because the pressures, working conditions
and pay get increasingly worse. EU health professionals stop working in the UK
after Brexit, and the so-called Brexit financial dividend proves a mirage.
We need a serious national conversation about how we realistically fund
the NHS and social care, which has to be led by our politicians across the
political parties.
Lord Warner served as a Labour health minister from 2003-07 and now
sits on the cross benches and Sir John Oldham is the adjunct professor for
global health at Imperial College, and is the former chair of the Independent
Commission on Whole Person Care.
