NHS needs 3.5 per cent annual funding increase, economists predict

New economic projections from the Office of Budget Responsibility suggest the NHS requires real terms funding increases of 3.5 per cent a year to 2030. The OBR’s projections suggest that UK health services would require a greater proportion of GDP to be spent on public healthcare, rising from 7.4 per cent currently to 8.8 per cent over the next 14 years. The projections assume policy remains unchanged but take account of rising costs and population changes.

Following the government’s spending review in 2015, health spending in England is set to increase by around 1 per cent each year to 2020, so meeting the projection would require a significant increase in funding.

Analysts at the Nuffield Trust think tank said the new “cost pressures projection” would require an additional £40bn by 2030, or £2.7m a year, found through extra taxation or shifting spending from other departments. Another £60m would be delivered by an overall projected increase in GDP, bringing a total real terms spending increase of almost £100bn over 15 years.

However, Nuffield Trust chief economist Professor John Appleby warned that all the estimates could be subject to change depending on the full impact of Brexit.

Full story in the HSJ 21 September 2016