The Tories are beginning to panic

Osborne’s last-minute claim that he would provide £8bn a year to meet the NHS funding gap says it all. After years of sniping at Labour for even the slightest deviation from funded expenditure, he now suddenly offers, as the polls begin to slip away from the Tories, a colossal pile of unfunded NHS commitments worth £40bn over the next 5 years, on top of the £7.5bn tax cuts for the rich which he frittered away in his last budget. This is a staggering slippage from his hitherto relentless demand for fiscal prudence and consolidation, but it certainly reveals how desperate the Tories have now become as health services top electors’ concerns and Labour’s lead stretches on the NHS.

But there’s much more lying behind this issue. Tory policy has been to protect the NHS budget in inflation terms, but provide no funding cover for the effects of demography (the ever-rising numbers and proportion of the elderly) and the costs of new drugs and technology, which together add 3-4% in overall costs every year. That has left the NHS with a £20bn black hole in its budget over the last 5 years, and one which is now expected to rise to £30bn by 2020. It has led to a third of hospital trust now being in debt, cuts to staffing and longer waiting times, and ever greater privatisation and outsourcing (which has proved more expensive and counter-productive).

The proposal now put forward by Simon Stevens, chief executive of NHS England (and a proponent of privatisation in the office of Blair when PM), is that this gap will be closed by £22bn in ‘efficiency savings’, leaving an extra £8bn per year to come from government. But where will these so-called efficiency savings come from? The NHS is already arguably the most efficient health service in the world: it costs the British taxpayer 7% of GDP, compared with 9-10% in Germany and France, and no less than 17% in the US. It has already been squeezed to the point where A&E, the benchmark of NHS pressure, is bursting at the seams. So where will this extra 2-3% increase per year in productivity come from, allegedly enough to squeeze out extra health services worth some £22bn at no extra funding cost?

That this is sheer fantasy is shown by research just published by the Health Foundation, an independent think-tank, which found that productivity had grown by an average of 1.2% a year from 2008-9. Moreover, when in 2013-4 hospitals faced severe cost pressures as spending on temporary staff grew by £1bn (or 28%) in a single year following the mid-Staffs scandal, efficiency growth in the hospital sector which consumes almost half the overall NHS budget averaged just 0.4% over the last 5 years.

The Tories have gone a long way to wrecking the NHS (which of course was part of their long-term plan to switch from a public to a privatised service), and the idea that it can be rescued now by Osborne’s finger in the dyke with £8bn a year funded (according to Hunt, the health secretary, by “the proceeds of economic growth”) is beyond satire.