Tax rises for NHS funding boost will be fair and balanced, says May

Tax rises to support a £20.5 billion-a-year boost to the NHS budget will be “fair”, Theresa May said as she promised to end the “sticking plaster” approach to health funding.

The Prime Minister acknowledged that the public will have to pay “a bit more” in tax in order to fund the extra £394 million a week going to the NHS in England in 2023/24.

She repeated her claim that part of the increase will be funded by a “Brexit dividend” – a suggestion which has been widely attacked as unrealistic, even by some Conservatives.

Health bosses said the promised increase still fell short of the 4% annual rise they had called for.

Mrs May also signalled she could tear up some of the changes to NHS structures put in place by former health secretary Lord Lansley as part of an effort to reduce red tape.

In a major speech at the Royal Free Hospital in London, Mrs May acknowledged that “despite more funding, more doctors and more nurses, and great progress on treatments, our NHS is under strain” as it copes with an ageing population and changing health challenges.

“We cannot continue to put a sticking plaster on the NHS budget each year,” she said.

“So we will do more than simply give the NHS a one-off injection of cash.”

Under the plans:

– NHS funding will grow on average by 3.4% in real terms each year from 2019/20 to 2023/24

– By 2023/24 the NHS England budget will have increased by £20.5 billion in real terms compared with today – an extra £394 million a week

– An additional £1.25 billion each year will cover pensions pressures

– Extra cash will be made available to Scotland, Wales and Northern Ireland under the Barnett formula.

Mrs May did not reveal how all the money would be raised, but said Chancellor Philip Hammond would set out the details “in due course”.

Extra cash for the NHS after quitting the European Union was a key promise made by the Vote Leave campaign, and Mrs May said some of the money would come from the “Brexit dividend”.

That claim has been dismissed as “tosh” by Tory Health Select Committee chair Dr Sarah Wollaston, while former minister Dr Phillip Lee said “there is no evidence yet that there will be a ‘Brexit dividend’ – so it’s tax rises, more borrowing or both”.

Director of the Institute for Fiscal Studies (IFS) Paul Johnson also said the so-called windfall from EU withdrawal would not materialise when the UK stopped paying more than £9 billion a year to Brussels due to the “divorce bill” of some £39 billion, and other economic factors.

But Mrs May insisted: “Some of the extra funding I am promising today will come from using the money we will no longer spend on our annual membership subscription to the European Union after we have left.”

But she added that “across the nation, taxpayers will have to contribute a bit more in a fair and balanced way to support the NHS we all use”.

Alongside the funding deal the Government will agree a 10-year plan for the future of the NHS to ensure that “every penny is well spent”.

It was a “problem” that clinical commissioning groups (CCGs) created under the Lansley reforms negotiate and monitor over 200 different legal contracts with other parts of the NHS.

“It is too bureaucratic, inhibits joined-up care, and takes money and people away from the front line,” she said.

“So where legislation is making it harder for professionals from different parts of the NHS and different local authorities to work together, we should be prepared to change it.”

Niall Dickson, chief executive of the NHS Confederation, welcomed the “sizeable investment” but said it “falls some way short” of the 4% annual rises experts had said was needed.

“These will still be tough years ahead,” he added.

NHS England chief executive Simon Stevens welcomed the money, saying “it represents a clear gear change in the amount of funding that will be available for the next five years, compared to what we have had over the last five years”.

Asked if he believed the “Brexit dividend” would deliver enough money, Mr Stevens told MPs: “Both the Prime Minister and the Chancellor are crystal clear that this money will be available to the National Health Service over the next five years.”

Shadow health secretary Jonathan Ashworth said: “The money announced today by the Prime Minister is not enough to save our NHS after eight years of Conservative austerity.”