Hammond and Hunt in battle over NHS funding boost

Exclusive: Chancellor wants to knock £2bn off health secretary’s push for extra £5.2bn a year

Jeremy Hunt and Philip Hammond are at loggerheads over how much more money the NHS should get to fulfil Theresa May’s pledge for a long-term funding deal to rescue the service.

The health and social care secretary and chancellor have been competing for the prime minister’s backing for their starkly different visions of how much extra cash the beleaguered service in England needs.

Hunt is pushing for an increase that would see the NHS budget rise by at least £5.2bn a year, while Hammond’s approach would mean an annual rise of about £3.25bn.

May plans to capitalise on the expected surge in support for the NHS around its 70th birthday on 5 July by announcing major, meaningful increases in its budget for the next few years. She is expected to set out exactly how much more the NHS will get each year until the end of this parliament, in 2021, and give indicative figures for the size of the increases in the next parliament.

Hunt wants her to start giving the health service as close as possible to a 4%-a-year budget increase for each of the next few years when she sets out the long-term funding plan she pledged in March.

But Hammond is resisting demands for the government to commit such large sums to health, and wants to cap the annual increase at 2.5%. He is concerned that any sum larger than that is unaffordable, given the state of the country’s finances and uncertain economic outlook, especially with the impact of Brexit still an unknown quantity.

If the NHS was given 4% average annual rises – the amount it received between its creation in 1948 and 2010, when the coalition government began limiting it to 1% a year – its budget would rise by at least £5.2bn a year over the course of the long-term deal, resulting in an extra £20bn by 2022.

That is vastly more than the sums set out under the government’s existing plan, which is for the health department’s budget to rise by £800m, from £126.4bn this year to £127.2bn in 2018-19. an increase of 0.7%.

Hammond’s 2.5% ceiling would boost the NHS’s budget by about £3.25bn. While this increase would be the biggest cash injection the service has received since 2010, it would be much less than the 4% rise that several key people say is needed to tackle the crisis in care provision, including the NHS England chief executive, Simon Stevens, NHS and doctors’ groups, the Office for Budget Responsibility and the Institute for Fiscal Studies.

Sources close to the discussions in Whitehall say Hunt appears to have been winning the battle for the prime minister’s ear. He has stressed the political damage the Conservatives will face if the service’s increasingly visible deterioration, and inability to meet treatment waiting times, continues. Patient satisfaction with the NHS has also fallen in a sign of growing public concern.

Cabinet ministers Boris Johnson and Michael Gove have argued recently for the NHS to receive a bigger budget to help fulfil the promise made by the Brexit campaign, in which they played key roles, that the NHS would get £350m more a week. The Tory backbencher Jacob Rees-Mogg has also advanced the same case.

Many of the royal colleges of medicine, health thinktanks and NHS groups – all of which see 4% as the minimum the NHS needs to receive for several consecutive years – have been invited to Downing Street in recent weeks to tell officials what life is like for frontline staff and what extra resources are needed.

“The prime minister is in listening mode on this,” one source said. “She genuinely wants to get this right. The end result will be a significant increase in the NHS’s budget.”

Sarah Wollaston, the Conservative chair of the Commons health and social care select committee, said she was encouraged by May’s recognition that the NHS needs a long-term funding deal and recent conversion to the case for a major increase in the budget.

“There’s been a definite change of tone and intention on health and social care. I hope that transfers into something significant that recognises the scale of the challenge,” she said.

Britain should aim to emulate the 11% of GDP which Germany and France put into healthcare, she said. The UK puts in 9.7%.

Richard Murray, the director of policy at the King’s Fund, said anything less than 3%-a-year rises would hasten the NHS’s decline. “Standards of care will fall and patients and their families will pay the price,” he said. “We have to remember that we are in the longest funding squeeze in the NHS’s history and cracks are beginning to show across the service.”

He said May’s promise of a long-term funding plan was “welcome acknowledgement that the system has been operating with far less than it needs to maintain standards”.

“To put the NHS back on a stable footing, the government must look honestly at all the challenges facing it – this includes day-to-day spending, but must also include the impact of increasing demand and the rising cost of care, medicines and staff pay – to make sure that the NHS can continue to provide the care and treatment that people will need into the future.”


Denis Campbell Health policy editor

The GuardianTramp

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