On NHS funding, it’s time to get real

Jeremy Hunt’s NHS has two seasons. ‘Crisis’ is a gloomy eight months of declining standards, missed targets and chronic understaffing. Then there’s ‘Winter crisis’: the annual nightmare of system meltdown when the deterioration in conditions and safety becomes spectacular enough to make the news. When this year’s catastrophe fulfilled all predictions, Hunt’s hollow apology perfectly matched the tone of his entire health policy. Hunt’s uncanny survival in the job is surely due to his brazen ability to say a lot of the right things – while ignoring the responsibility to act accordingly. We hear lots about prevention at the same times as English public health is being dismantled and action on air pollution and obesity is being postponed indefinitely. Care, Hunt tells us, must be moved into the community yet community nursing has suffered crippling cuts and social care has collapsed.

To our shame, Labour has been complicit in the biggest hypocrisy of all: that we can have ‘world class’ health care, without having to fund it. Labour has talked much of its ‘fully costed’ plans but the truth is that last year’s manifesto would have left a £17bn funding gap in NHS finances by 2022-23. This is a conservative estimate since it is based on ‘standing still’ and doesn’t take into account Labour’s additional manifesto commitments in the manifesto on health along with areas of huge unmet need in areas like mental health. Now John McDonnell is talking of an emergency budget, taxing the top 5 per cent earners to bring in £5.1bn. Does this mark a long-awaited shift in funding for the health service?

For decades Labour strategy has been to ‘bank’ the safe NHS vote, allowing the party to fudge its planning and facilitating more daring commitments elsewhere. Voters have to rely on trust (and to be fair, experience) that in the end Labour will ‘do the right thing’ and find some money for the NHS when in office. Tactically, this is probably a useful strategy in the short term. It is a disaster for the long-term sustainability of the NHS.

The yo-yo diet of crisis and bail out makes long-term planning and capacity-building impossible. Counterproductive as New Labour and Conservative ‘reforms’ have been, simply reversing privatisation and fragmentation will not be enough. This crisis in staffing and morale exemplifies the dire state of NHS planning. Workforce is the existential crisis that the NHS faces right now, with an astounding 10 per cent of nurses leaving annually, more than half of whom are aged under 40. The staffing crisis alone means that any substantive change in our relationship with the EU is incompatible with the practical socialism of a functioning health and social care system, at least in the short term.

As things stand another Labour government could patch up the NHS for long enough to fight another day. But how do we ensure the long-term survival of the NHS?

Deferring responsibility to a Royal Commission is of course tempting. Yet the problems are so well understood that this would be utter cowardice. A social insurance model, common in continental Europe, is occasionally mooted with the benefit, it is said, of allowing people to understand what they pay for health and in turn receive. But it would be absurd to endure this scale of reorganisation when we know that a system funded centrally through tax is the most efficient way to organise health. A hypothecated tax could be part of the answer. Long considered economic heresy, even the Financial Times now considers the advantages of a hypothecated tax in making funding explicit and removing the temptation to resort to accounting trickery.

But on its own, a ring-fenced tax won’t secure the future for health and social care. We desperately need more investment and leaders with the courage to own up to the fact that this will require increased taxation, or sacrifices elsewhere. If Labour is prepared to go in this direction, it will be starting to offer the honest planning and leadership in health care we need.

The only long-term guarantor for the NHS is the political will to acknowledge and plan for the scale of funding that health and social care requires.

For more information on the Fabian Health Group email healthgroup@fabians.org.uk