Funding health and social care: House of Lords committee on the long-term sustainability of the NHS

This note sets out the Nuffield Trust’s views on key questions concerning the House of Lord's Committee’s investigation of the sustainability of the NHS over the next fifteen years. It updates oral evidence given to the Committee on 6 September 2016 by Prof John Appleby, Director of Research and Chief Economist, in the light of a new survey of the literature on spending projections and, in particular, new projections for health spending published by the Office for Budget Responsibility on 21 September 2016.

Briefing

Published: 01/11/2016

Download the briefing [PDF 581.9KB]

Key points

  • New OBR projections suggest that public spending on health care in the UK could rise from 7.4 per cent of GDP in 2015/16 to between 8.8 per cent and 8.9 per cent by 2030/31 – equivalent to a rise of just under £100 billion over the next 15 years, of which 60 per cent would come from projected growth in GDP and the remainder from a combination of tax and reprioritisation of other public spending.
  • Choosing a specific spending path for health (such as the OBR’s ‘declining cost pressures’ projection) would be a financially sustainable position that would enable the quality and volume of health care to grow more or less in line with public expectations and medical technology.
  • Pressures to spend more on social care will inevitably also grow overtime, and other sustainability problems are inherent in this area given its funding sources and traditional separation from health.
  • The OBR’s ‘declining cost pressures’ projection for social care spending to 2030/31 would add a further 0.6 per cent of GDP from the 2014/15 level. Around 30 per cent of this increase would arise from projected growth in GDP, leaving around £16 billion to be found via a combination of tax and reprioritisation of public spending.
  • We will end up paying more for social care one way or another – either through higher taxes for improved services; directly from the public’s pocket; or through non-financial costs arising from reduced access to publicly funded services. The issue is how to ensure extra spending delivers what we want from social care, including, we argue, equal opportunity of access for equal needs.
  • A smoother, steadier spending path over the long term would not only support the decisions health and social care need to take to be sustainable, but would increase the transparency for the public about the financial commitment they could be asked to make.
  • The investigation into long-term health and social care spending and sustainability should not just be an ad hoc exercise. There is a need for a wider-ranging independent review of the long-term future for care every three-to-five years to inform public and political debate.

Suggested citation

Nuffield Trust (2016) House of Lords committee on the long-term sustainability of the NHS. Nuffield Trust briefing.

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