Modest increases in funding could do little more than ‘manage decline’, report suggests

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UK spending on healthcare will need to rise by an average of 3.3 per cent a year over the next 15 years just to maintain NHS provision at current levels, an NHS Confederation-commissioned report into health and social care funding suggests.

To improve services, healthcare funding will require an increase of at least 4 per cent, the report projects.

And outlay on social care will need to rise by 3.9 per cent a year to meet the needs of an ageing population and an increasing number of younger adults living with disabilities, a the report authored by the Institute for Fiscal Studies and Health Foundation says.

The findings suggest that even with modest real terms increases every year we could still be doing little more than managing decline, the head of the NHS Confederation, which commissioned the publication, said on Thursday. "Such is the challenge of an ageing population with more people living with chronic conditions."

Analysis in Securing the future: funding health and social care to the 2030s projects that by 2033–34, there will be 4.4 million more people in the UK aged 65 and over, with the number aged over 85 likely to rise by 1.3 million. Additionally, the numbers of people with chronic diseases, and especially the numbers with multiple chronic diseases, are growing rapidly.

Over the next 15 years, spending in acute hospitals to treat people with chronic disease is expected to more than double.

Without major changes to the way healthcare is provided, to meet the needs of a growing and ageing population, hospital activity is projected to increase by almost 40 per cent over the same period.

The report sets out a number of options for how funding for health and social care could be raised, given the impact of demographic change, population health, rising costs and workforce shortages.

It concludes that taken together, health and social care spending is likely to need to rise by 2–3 per cent of national income over the next 15 years. Funding this uplift would almost certainly require an increase in taxes, the report says.

'Wake-up call'

Niall Dickson described the report as a ‘wake-up call’ with one simple message: “if we want good, effective and safe services, we have to find the resources to pay for them.”

“It is now undeniable that the current system and levels funding are not sustainable," he said. "Without new ways of delivering services and sustained investment, NHS and care services will not cope and we will face a decade of misery in which the old, the sick and the vulnerable will be let down."

“It is time for honesty and a wider public debate about what sort of services we want and how much they will cost. The Prime Minister and the health secretary deserve great credit for recognising that we need a significant and a longer-term settlement and that both health and care need to be tackled.

The report is a rallying cry to government to act on one of the biggest social issues of modern times.

Other findings in Securing the future include:

  • A lack of qualified clinical staff will be the biggest impediment to making effective use of additional funds – over the next 15 years, the English NHS is likely to require 64,000 extra doctors and 171,000 extra nurses.
  • The workforce challenge in social care is just as acute, with over half a million more staff required by 2033–34.
  • Spending on hospital drugs has been rising by more than 5 per cent a year in recent years – this is likely to continue.
  • Tax rises of at least 1.6 per cent of national income, and up to 2.6 per cent of national income (£34-56 billion in today’s terms), will be required by the mid-2030s for the NHS, with an additional rise of 0.4 per cent of national income to meet pressures on social care.

The publication is the result of careful ‘bottom-up’ modelling of supply and demand factors in the health and social care sectors. It uses a different approach from the more usual ‘top-down’ methods for forecasting spending, building up spending needs from detailed models of demographic change, population health and cost data.

The report’s editors, Anita Charlesworth and Paul Johnson, will explore the key themes of the study at an opening plenary session at Confed18, the NHS Confederation’s annual conference on 13 and 14 June.

In recognition of the crippling effects of rising demand, underfunding and workforce shortages, the NHS Confederation has launched a petition calling on the government to commit to a funding plan for health and social care to 2035.

Find out more

Download Securing the future: Funding health and social care to the 2030s.

Sign the NHS Confederation's parliamentary petition calling for a long-term funding plan for health and social care.

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