The growing stranglehold of the NHS over public spending was underlined today as Brits digest Rachel Reeves’ plans.
A respected think-tank has insisted the UK is turning into the ‘National Health State’ after another major funding boost.
In an extraordinary spree, the Chancellor allocated an extra £29billion per year and more cash for capital investment.
Ruth Curtice, chief executive of the Resolution Foundation, pointed out that amounted to 90 per cent of Labour’s extra public spending.
She cautioned that continued a ‘trend that is seeing the British state morph into a National Health State, with half of public service spending set to be on health by the end of the decade’.
The latest huge cash injection comes despite concerns about progress in improving productivity in the NHS.
Health service chiefs have also been warning that more money will be needed, with nurses already balloting for industrial action over an inflation-busting 3.6 pr cent pay offer.
Matthew Taylor, of the NHS Confederation, which represents health organisations, said: ‘Difficult decisions will still need to be made as this additional £29billion won’t be enough to cover increasing costs of new treatments, with staff pay likely to account for a large proportion of it.
‘On its own, this won’t guarantee that waiting time targets are met.’
Sir Jim Mackey, chief executive of NHS England, told the NHS ConfedExpo conference in Manchester that the health service has done ‘really well relative to other parts of the public service’.
But he added: ‘We all know it’s never enough because of the scale of advancement, all the ambition, the day-to-day cost pressures… but I think everyone’s starting to accept and understand we’ve got what the country can afford to give us.
‘We really need to get better value for that money – it is broadly the equivalent of the GDP of Portugal, so it’s a huge amount.’
Ms Curtice said defence was another winner from the Spending Review, receiving a significant increase in capital spending while other departments saw an overall £3.6billion real-terms cut in investment.
The Institute for Fiscal Studies (IFS) has made similar arguments about ‘substantial’ investment in the NHS and defence coming at the expense of other departments, although the think tank’s director Paul Johnson warned the money may not be enough.
He said: ‘Aiming to get back to meeting the NHS 18-week target for hospital waiting times within this Parliament is enormously ambitious – an NHS funding settlement below the long-run average might not measure up.
‘And on defence, it’s entirely possible that an increase in the Nato spending target will mean that maintaining defence spending at 2.6% of GDP no longer cuts the mustard.’
Ms Curtice added that low and middle-income families had also done well out of the spending review ‘after two rounds of painful tax rises and welfare cuts’, with the poorest fifth of families benefiting from an average of £1,700 in extra spending on schools, hospitals and the police.
She warned that, without economic growth, another round of tax rises was likely to come in the autumn as the Chancellor seeks to balance the books.
She said: ‘The extra money in this spending review has already been accounted for in the last forecast.
‘But a weaker economic outlook and the unfunded changes to winter fuel payments mean the Chancellor will likely need to look again at tax rises in the autumn.’
Ms Reeves insisted she would not have to raise taxes to cover her spending review – but stopped short of ruling them out.
She told GB News: ‘Every penny of this is funded through the tax increases and the changes to the fiscal rules that we set out last autumn.’