Commission Impossible? Why a royal review might struggle to solve the NHS funding crisis

Later today, Members of Parliament will debate a backbench motion calling for a cross-party Royal Commission into long-term funding for health and social care. Mark Dayan examines where a royal commission really is the answer for our struggling NHS.

Blog post

Published: 28/01/2016

Later today, Members of Parliament will debate a backbench motion calling for a cross-party Royal Commission into long-term funding for health and social care. The idea was first mooted earlier this year by Stephen Dorrell, Alan Milburn and Norman Lamb, each formerly their party’s top health minister.

The issue of how much we spend on health and social care affects almost every citizen. It has been increasingly dominating conversations over both public finances and care services in recent years, and it is slowly coming to the boil as pressures mount. It deserves its day in Parliament. But is a Royal Commission really the answer?

The financial situation in the NHS

It is now almost too obvious to say that the NHS in England is under enormous financial strain. In the next few months, we are likely to discover that the underlying deficit run up this year alone by NHS Trusts as their costs exceed the money they receive is more than £2 billion. That is twice as much – for example – as the cost of the Foreign Office and Britain’s worldwide diplomatic service.

There is little respite in sight over the next few years. At the Spending Review the Government dutifully paid the headline figures demanded in the Five Year Forward View. They allocated an additional £8 billion by 2020, with £3.8 billion up front next year, to NHS England. However, a significant proportion of this funding will come from cuts or restrictions to other important health spending. It seems clear that much of the £2.1 billion 'Sustainability and Transformation Fund' allocated to support fundamental reforms from next year will initially be eaten up by filling the existing deficits – and as Sally Gainsbury shows in her blog, that will continue for much of the decade.

Up to 2020, health spending in England will remain on a similar course to that since 2010 , rising by less than one per cent each year. The spending settlement will mean roughly similar trends in Wales, Scotland and Northern Ireland. Yet with a growing and ageing population, the need for health care is already rising more quickly. New medical technologies further increase costs – and success in saving lives will mean, for all the right reasons, even faster growth in older age groups. This underlying mismatch between funding and need will drive further pressure on finances, targets and standards.

And then there is a problem on the scale of decades: through successive governments the UK has spent a smaller proportion of its GDP on health care compared to peers like France or the Netherlands. Although many areas of NHS care are good and continue to improve, we also lag behind on some important metrics such as preventable health problems and stroke mortality. It is likely that there is an element here of getting what we pay for.

Funding for social care

Even the NHS, however, looks comfortably funded compared to adult social care in England. The Spending Review will allow extra two per cent rises in council tax to fund care homes, nursing homes and support from care workers for those who cannot afford to pay themselves. It will give local authorities a chance to keep up current levels of spending. However, it will not reverse 16 per cent cuts since 2010 which have seen 400,000 fewer people receiving publicly funded help even though their needs are significant. Because it will not keep up with rising numbers of over-65s, the settlement is in fact likely to result in even more limited numbers being supported.

Across the UK, a strictly rationed system of personal care for the elderly sits uneasily alongside the comprehensive NHS, creating obstacles when it makes sense for people to transfer from health care to social care. There is a strong case for fundamental reform.

Is a Royal Commission the answer?

The three ministers proposing the Royal Commission understand this. Their attempt to get other politicians to join them in facing up to these problems is admirable. As they and the backers of today’s motion understand, we do need a long-term perspective, decisions based on listening to every sector of society, and the inclusion at every stage of social care alongside health care.

But recent political history is littered with commissions and inquiries which were forgotten when their recommendations failed to line up with what the public, political leaders or the Treasury were ready to hear. The Dilnot inquiry was highly respected and rigorous, but its recommendation for a cap on social care spending was cancelled in the short term as local authorities told the Government it was unaffordable. The Airports Commission had perhaps the clearest question set – essentially, Heathrow or Gatwick. It gave a clear answer, backed by analysis and evidence. The impact on the ongoing political squabble over the issue was close to zero.

On the other hand, if a committee’s recommendations fall within what Government and public opinion is ready to hear, as the Wanless review did in the previous decade, then it can play an important role in shaping policy. In these circumstances, cross-party commitments can work: we suggested shortly after the General Election that the incoming Government should move to stand behind a fundamental review.

But that genuine commitment to taking the painful decision between taxation, borrowing, or a historic cutback of publicly funded care needs to exist across all parties and the general voting public before any review gets underway. It currently does not, and it will not suddenly appear when an appointed grandee files their recommendations. Without it, recommendations from even the most respected Royal Commission risk being ushered into Westminster’s famous fields of long grass, where unpopular ideas go to die.

Suggested citation

Dayan M (2016) ‘Commission Impossible? Why a royal review might struggle to solve the NHS funding crisis’. Nuffield Trust comment, 28 January 2016.