NHS could face bill of over half a billion pounds from Brexit

New briefing shows the NHS could face large costs if retired British people living in other EU countries decide to return to UK in the event of their healthcare being withdrawn after Brexit.

Press release

Published: 31/05/2017

Updated: 31/05/17

The NHS could face a bill of almost half a billion pounds if retired British people currently living in other EU countries decide to return to the UK in the event that their right to healthcare in those countries is withdrawn after Brexit. This figure could be substantially higher if the NHS has to pay to replace staff if EU migration is reduced, or if it faces a rise in the cost of medicines.

The report also calculates that care homes and home-care agencies could end up as many as 70,000 staff short by 2025/26, if migration of unskilled workers from the EU is halted after Brexit.

These are the findings of a new briefing on the impact of Brexit on the NHS and social care from the Nuffield Trust.

It is possible that extra funds could be found for the NHS from any cancellation of Britain’s EU membership fees – but whether or not these benefits will outweigh the significant staffing and financial costs Brexit may impose on already stretched services remains to be seen

Mark Dayan, Policy and Public Affairs Analyst, Nuffield Trust

The new research, Getting a Brexit Deal that Works for the NHS, is the second of the Nuffield Trust’s election briefings. It points out that ahead of the 2017 general election, polls show that the public say that the two most serious issues facing Britain are leaving the European Union, and the NHS (see note 1) – and stresses that the two issues are closely connected. The briefing sets out what the next government needs to secure under the Brexit deal in order to protect the interests of the NHS, social care and the people who use them.

Its main findings are that:

  • 190,000 British pensioners currently live in other EU countries like France and Spain and receive healthcare under the EU reciprocal ‘S1’ scheme. If they decide to return to the UK in the event that this benefit is withdrawn after Brexit, then the cost to the NHS is likely to be around £979 million – around twice the amount that the UK government currently reimburses to other EU states for their care, i.e. around £500 million net.  This calculation is based on the age profile of the people involved, and their likelihood of using healthcare (see note 2). 
  • Around 900 extra beds, enough to fill two new hospitals the size of St Mary’s Hospital, London (see note 3), would be likely to be required if this number of British pensioners returned – but the briefing argues that unlike funding, beds and staff cannot simply be brought on-stream at will.
  • There is also a risk that the NHS will no longer have access to as wide a supply of medicines at as good a price if the UK leaves the EU’s medicine licensing system.  The extra cost could exceed £100 million (see note 4).
  • It is possible that there could be some upsides to Brexit for the NHS. While all sides in the Brexit debate agree that the £350 million per week figure used during the EU referendum will not materialise, there is still the scope for a funding boost for the UK when it stops paying its EU membership fees, which could give the NHS additional money for one or two years.
  • But the analysis calculates that social care faces a shortfall of as many as 70,000 workers by 2025/6 if net migration of unskilled workers is halted after Brexit.  It argues that either substantial migration of such staff from the EU will have to continue after Brexit, or wages in UK care homes and homecare agencies may need to rise – for example to compete with pay in the retail sector -  to attract more home-grown staff.
  • The NHS is dependent on nurses from other EU countries to prevent the serious problem of understaffing from getting even worse, with 22,000 currently working in the health service in England.  The briefing points out that there has been a dramatic rise in the number migrating from the European Economic Area, so that by last year, almost a third of newly-registered nurses in the UK had trained in the EEA (see note 5).  It argues that there must be a commitment either to continue to allow substantial nurse migration after Brexit, or to increase the number of places for nurse training courses in this country.
     

Report author Mark Dayan, Nuffield Trust Policy and Public Affairs Analyst, said:

“The NHS and social care were already under pressure from tight funding settlements and growing staffing problems well before the EU referendum last year.  But if we handle it badly, leaving the EU could make these problems even worse, given the potential impact on both the strength of the UK economy and the supply of overseas staff to both health and social care services.

“It is possible that extra funds could be found for the NHS from any cancellation of Britain’s EU membership fees – but whether or not these benefits will outweigh the significant staffing and financial costs Brexit may impose on already stretched services remains to be seen. 

“That depends largely on the NHS being recognised as a significant priority as we enter some of the most important negotiations in Britain’s history”.

Notes to editors

  1. See for example: Ipsos MORI (2017): Brexit and NHS are the joint top issues for Britons 
  2. This figure has been calculated using NHS England’s estimates for the cost of providing healthcare to different age groups, which reflect the fact that older people tend to need more care.  It assumes that pensioners abroad have the same age structure as over-65s resident in England. Some of these estimates are available publicly in NHS England’s NHS Five Year Forward View: Recap briefing for the Health Select Committee, available here: www.england.nhs.uk/wp-content/uploads/2016/05/fyfv-tech-note-090516.pd).
  3. Care Quality Commission (2015) St Mary’s Hospital.
  4. The Healthcare Distributors’ Association, which represents suppliers, has said that not being able to import cheaper medicines from other EU countries after Brexit could cost £100m each year. Costs could be still higher if this then reduced competitive pressure on the price of medicines.
  5. Royal College of Nursing (2016) Unheeded Warnings: Health and care in crisis. The UK nursing labour market review 2016.  
Updated 31/05/2017

For the avoidance of doubt, the total additional cost of caring for British pensioners if they return to the UK is just under £500m net, as our press release sets out, as the UK government currently spends around £500m on the S1 scheme. The total cost of their care before this £500m is deducted is £1bn.

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