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Speaking at a debate organised by CIPFA and the think-tank CoVi yesterday, Lansley falls in NHS spending (as a percentage of gross domestic product) are not likely be sustainable in the long term.
“In order for the NHS to be stronger and for us to support a sustainable NHS long term we need Britain to have a sustainable strong economy, and long term there is a direct relationship between our GDP growth and our ability to fund the NHS,” he told attendees.
“As it happens spending on the NHS at a proportion of GDP has gone down, from about 7.5% in 2010 to about 7.1% now and the figures suggest it will go down to about 6.8% at the end of this parliament. Frankly, in my view, that is only a consequence of the deficit reduction programme. I don’t think anyone imagines that in the long term we can cope with a declining proportion of GDP to support the NHS.”
He cited Treasury projections – set out to support the government’s case to remain in the EU – that GDP would be around 6.2% lower after 15 years if the country were to negotiate a bilateral agreement in place of current single market access illustrated the threat to health service funding.
“If you look at the Five Year Forward View for the NHS, one of the propositions put forward by Simon Stevens was that in order to cope with demographic change, the rise in population and the rise in costs, the NHS should at least have a real terms increase, that’s the minimum. It is preferable have a real terms budget increase per person, so rise in line with the population, but best of all is a proportion of GDP that is constant or growing, that is best.”
This is what will be required for the NHS to meet quality expectations, he said. “And if you look at the data, it suggests that to 2030 there could be up to a 6% gap in GDP between [the UK staying] in the European Union or [coming] out of the European Union. What that implies is 6% of the NHS budget too, which is £7bn odd, probably nearer £10bn by the time you get to 2030.”
There is “no way” that this could be made up from the money saved from EU contributions, he added.
Jane Payling, head of health and integration at CIPFA, added that forecasts showed that leaving the EU would have at least a short-term impact on the size of the UK’s economy.
“Regardless of the size of that, the direct impact will be on the overall ability to bring in taxation for public services,” she told the event.
“Assuming that the chancellor sticks to his commitment to eliminate the deficit, or even if he relaxes that slightly, it will inevitably lead, at least in the short term, to further pressure on the public finances. And although health is relatively protected in that, it is hard to see how that could continue in an age when the overall funding level was lower.”
There were only three solutions to this, she added – further diversion of funding from other areas of public spending, co-payment funding or greater contribution from the private sector, or greater rationing of services.
“For me, that’s the greatest overall impact. If the economy will be affected, which it is predicted to be, then I am already worried about the availability of resources for the NHS, and I think here is a real danger that this could put extra pressure on that.”
The event also heard from Tamara Hervey, Jean Monnet professor of European Union law at the University of Sheffield, who said there was nothing in EU law that directly affects the funding or structure of the NHS, and nothing that requires privatisation of the NHS. Those were decisions for national governments, she said, but there are some European rules that affect the way the health service is run. Once a country decides – as happens in the UK – to involve competition in its health service, then European Union competition law affects those aspects of the health service organised in that way.
“However, and this is the bit that is often missed, the way that those bits of European Union rules are interpreted and the way they are applied, respects to a large extent national decisions about how national health systems are organised and the values that those national health systems express.”
Responding to concerns that the proposed transatlantic trade and investment partnership (TTIP) could lead to increased privatisation of the NHS, Hervey said it would only apply where there is a market element to the provision of services in the NHS. It was also still open to government to negotiate an opt-out.
“Even is there is no negotiated opt-out, the TTIP will still permit regulation for legitimate policy objectives. So free trade between the EU and US will still be able to be restricted if there is a legitimate policy objective, and it is difficult to think of a policy objective more legitimate that national and population health.”
She highlighted that if the UK left the EU, the country would not be bound by TTIP, but the treaty itself was not the danger to the NHS that some people claim.
“The danger is the way our government has chosen to organise the NHS, and that’s a national decision, it is not an EU decision. Overall and on balance I don’t think the TTIP is actually the problem that it is being said to be.”
• This was the first in a series of events being hosted by CIPFA with the think-tank CoVi ahead of June’s referendum looking at the impact of the EU on public services. For more information and to register for the events, please visit: http://covi.org.uk/events/
