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Healthcare: Spending

Volume 782: debated on Tuesday 4 April 2017


Asked by

To ask Her Majesty’s Government whether they will increase spending on healthcare as a percentage of gross domestic product to be in line with the G7 average.

My Lords, since 2010 health spend has increased in real terms and is broadly in line with the EU average. This Government are giving the NHS an additional £10 billion above-inflation increase in its annual funding by 2021. We have now gone beyond that, with £425 million of new capital spending for the NHS announced at the spring Budget, and we have pledged to provide further capital at the autumn Budget.

My Lords, I thank the Minister for his Answer, which goes a long way towards explaining why the NHS is at breaking point. Our hospitals and GPs’ surgeries are full, social care is on its knees and staff are working in impossible conditions. Those are not my words; they are the words of the BMC, which knows what it is talking about. My Question is not about Europe; it is about the G7. First, will the Minister confirm that as a country we are next to the bottom of the G7 nations in health spend? Secondly, why will the Government not commit us to meeting the average of the G7 countries, which would go a long way towards reviving our wonderful National Health Service?

The noble Lord makes the point that the NHS is operating in challenging conditions, not least because of rising demand and expectations. Notwithstanding that, there is a huge improvement in performance. More operations are being performed, there are more diagnostic tests, more people are starting cancer treatment, and people say that they have never been more satisfied with the quality and dignity of care that they are receiving. Those are the points that we need to bear in mind when we talk about the fantastic work that NHS staff do.

My Lords, perhaps we can push the Minister for a clear answer on this. The average spend of G7 economies is 10.4% of their GDP in comparison with the UK’s 9.8%—a gap of £10.3 billion. The Government are proudly saying that they are putting in just under £0.5 billion this spring, with a bit more capital to follow, but what are they going to do to address that shortage, given that £10 billion could provide 10,000 extra GPs and other help in primary care?

As I referred to in my previous answer, the Government have provided additional funding to the NHS—£10 billion more by 2020. It is also worth noting that since the 2015 election over £9 billion of additional funding has been found for social care, which of course has huge strains upon it, and that makes a big difference.

Does the noble Lord agree with Brian Ferguson, the chief economist of Public Health England, when he says that prevention is much more cost effective than other forms of intervention and that we have to push up the amount of spending on that, which is in the region of 4% to 5%? Is the Minister prepared to talk to MPs and Lords who want to push up the amount spent by this Government on prevention methodology in this country?

The noble Lord is quite right: we need to move from an NHS that deals with illness to one that promotes healthcare, and preventive healthcare is a huge part of that. We are providing over £16 billion of public health funding for local authorities to do that over the period of the spending review. Of course, I shall be delighted to meet any Peers and MPs who want to talk about that further.

What is the Minister’s response to the fact that we have seen the largest sustained reduction in spending as a percentage of GDP in the history of the NHS? Does not that explain why the NHS system is in crisis?

The noble Lord might be interested to know that health funding as a proportion of public spending has increased since 2010, from just over 18% to almost 20%. He talks about a challenging position, but that is not just because of rising demand or an ageing population. It is worth remembering that when the coalition Government came into office, we were borrowing £150 billion a year. It is a fantastic testament that we have managed to increase spending on healthcare in real terms while dealing with the problems that Labour left us.

Does my noble friend not agree that in making comparisons between the proportion of GDP spent on health by ourselves and other G7 countries, one reason there is a difference is because most other countries in the G7 have a variety of funding sources and are not all providing tax-funded services? Some of them have larger voluntary sectors and some have a larger contribution from the private sector. Although this is a very real problem, is not one avenue for changing things that ought to be considered looking to expand the private and voluntary sectors as well?

My noble friend is quite right to point out that there are different funding systems in different countries. We, of course, have a taxpayer-funded system that is free at the point of use, which this Government are fully committed to. There are different ways of funding healthcare. However, it is worth reflecting on polling carried out by Ipsos MORI which showed that 69% of the public said they get good healthcare in the UK, contrasted to just 57% in France and 59% in Germany. That is a huge testament to the work that everyone in the NHS does.

My Lords, does the Minister accept that there is a real problem here? On prevention and the work that NHS England is trying to do to change the system, does he further accept that there is a need for transitional funding, not least for running services in parallel? Additional funding is needed to make the changes that need to happen.

The noble Lord is quite right and he speaks with great authority on this issue. The sustainability and transformation plans are providing the changes that we are looking for. That is precisely why additional capital funding was announced in the Budget: to provide and seed that kind of change so that we can run in parallel services that we need to reduce and upscale those that we need to increase, particularly community care.