NHS Spending Falls Short as Inflation Squeezes Budget

UK's NHS spending increases at 2.7% per year, falling short of the promised 3.3% annual increase. The underfunding has significant implications for the healthcare system, with record waiting lists and a growing maintenance backlog.

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Aqsa Younas Rana
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NHS Spending Falls Short as Inflation Squeezes Budget

NHS Spending Falls Short as Inflation Squeezes Budget

The UK's National Health Service (NHS) spending has increased at a rate of 2.7% per year, falling short of the promised 3.3% annual increase pledged by Boris Johnson in 2019, according to a new report by the spending, risen, less, quickly, planned, last, ele Institute for Fiscal Studies (IFS). This comes despite record waiting lists and the demands of the pandemic putting immense pressure on the healthcare system.

Why this matters: The underfunding of the NHS has significant implications for the health and wellbeing of the UK population, particularly vulnerable groups such as the elderly and those with chronic conditions. If not addressed, this could lead to a decline in the quality ofhealth, spending, less, government services, further exacerbating the existing crisis.

The IFS reports that NHS day-to-day spending has grown by 2.7% a year during the current parliament, below the 3.3% promised by the Conservatives in 2019. The government had pledged to increase spending by £34bn a year by the end of the parliament, amounting to a 29% cash increase between 2019 and 2024-25. However, higher than expected inflation, which rose sharply to 11.1% in October 2022 as measured by the consumer prices index (CPI), has eaten up the extra funding, resulting in a spending, rise, behind, funding increase of just 2.7% a year.

The IFS describes the NHS as being in a "poor state of repair" due to a lack of investment over the past decade and a half. The maintenance backlog has more than doubled over the past decade, and capital spending has been cut back sharply in the 2010s. Max Warner, an IFS economist, notes that "delivering funding increases at anything like the historical average would require cuts elsewhere, even before accounting for recent promises on defense spending."

Although day-to-day NHS spending has undershot the plans made in 2019, health spending has grown as a share of GDP and now accounts for more than 40% of total public spending. The IFS warns that the next government will come under pressure to increase the health budget, with both main parties endorsing the NHS England workforce plan, which requires real-terms funding growth of about 3.6% a year.

Spending per person on the NHS is higher in Scotland, Wales, and Northern Ireland than in England, although the gap has narrowed in recent decades. A Department of Health and Social Care spokesperson claims that the government is providing the NHS with record funding of nearly £165bn a year by the end of this parliament, an increase of 13% in real terms compared to 2019-20.

The NHS faces significant challenges, with millions, month, see, delays, hit, record, levels having to wait over a month to see their GP and the waiting list for treatment standing at 7.71 million at the end of October 2022. The GP appointment crisis is attributed to a growing population and a dwindling workforce, with family doctors opting for early retirement, moving abroad, or switching to the private sector due to mounting pressure. As the NHS grapples with these pressures, the next government will need to confront the reality of NHS funding and make difficult decisions about budget allocations to ensure the sustainability and quality of healthcare services in the UK.

Key Takeaways

  • NHS spending increases at 2.7% per year, below the promised 3.3% annual increase.
  • Underfunding has significant implications for the health and wellbeing of vulnerable groups.
  • NHS day-to-day spending grows 2.7% a year, below the promised 29% cash increase.
  • NHS faces significant challenges, including record waiting lists and GP appointment crisis.
  • Next government must confront NHS funding reality and make difficult budget decisions.