The economist John Mclaren cuts through the spin to the truth of who is spending most on the NHS
This is what the various manifestos say about NHS funding.
- Scottish Conservatives – Triple lock of either 2%, inflation or Barnett consequential’s for NHS
- Scottish Greens – Increased funding for NHS
- Scottish Labour – Increase funding each year in real terms
- Scottish Liberal Democrats – Funding the NHS so that its stays ahead of inflation and in pace with the UK
- SNP – Invest £500m more than inflation in the NHS over the parliament, an extra £2 billion to the NHS budget over the next 5 years
- RISE – No mention of NHS funding levels in their webpage manifesto, but a pledge to ‘release the pressure’ on funding in the hard copy of the manifesto.
- UKIP – Keeping the NHS free at the point of delivery
How to interpret this?
It is important to be clear whether we are talking about NHS spending or Health spending. For example, funding for GP’s, Dentists etc is out-with the NHS Budget, which is why their budgets have been less protected in recent years.
In this instance most of the claims made in the Manifestos appear to be in relation to overall day-to-day Health spending (i.e. excluding capital spending on investment).
Protection in ‘real’ terms means protection against inflation, so that the buying power of the budget remains the same. However, NHS related inflation is typically higher than average inflation so this may degree of protection may not be enough to retain such spending power.
A pledge to devote the Barnett consequential’s (i.e. the amount the Scottish Budget automatically receives as a result of funding for the English NHS rising) to the NHS/Health sector in Scotland is worth considerably more than simply protecting against inflation.
As a result the SNP’s pledge to add an extra £2 billion to the NHS budget over the next 5 years need not involve anything more than passing on the Barnett consequential’s up to 2021-22. We cannot be sure as we only have knowledge of these consequential’s to 2020-21. If it actually was £2 billion then this would suggest more money than the consequential’s likely but in fact it is much nearer to £1.75 billion, so there has been a heroic degree of ‘rounding up’ to get to the £2 billion figure.
As-well as not having full knowledge of future Barnett consequential’s to 2021-22, neither can we be sure of what future inflation will be.
Who is ultimately pledging to put the most money into the NHS in Scotland?
At first sight the SNP’s pledge would appear to be the strongest, guaranteeing a fixed amount above inflation that is likely to match or possibly be slightly above Barnett consequential’s.
Not far behind lie the Conservatives with their triple lock pledge that includes full Barnett consequential’s for the NHS and the Lib Dems, with their pledge to keep in pace with the UK.
The situation with the other parties is less clear.
Each (with the exception of UKIP) is actually raising more money through new taxes than either the Conservatives, the Lib Dems or the SNP, in some cases considerably more. However, none of these additional funds have been explicitly linked to the NHS.
It seems highly likely that the lack of a commitment to any more funds, or in Labours case to only rising in real terms, is simply a case of loose drafting of the Manifesto, although it is a considerable oversight that could be seen as telling in its own right. In practice it seems scarcely credible that Labour would raise an extra £1 billion in new revenues and at the same time fail to pass on Barnett consequential’s to the NHS.
Equally for RISE and the Greens it seems implausible that, with even higher amounts of new revenue available that they too would not at the very least pass on Barnett consequential’s to the NHS in full.
One curious aspect of the debate over NHS funding is how much it is driven by decisions made in England. The defining element of the discussion is the Barnett consequential’s that the Scottish Budget automatically receives as a result of changes to the funding of the English NHS. These, quite clearly, relate to the future needs of the English NHS, as laid out in recent reviews. It is not at all clear why Scottish NHS funding needs should match these so closely.
It should also be borne in mind that the more money goes to the NHS/Health, the less there is available for other vital public services.
– Scottish Government Draft Budget 2016-17, December 2015
– Office for Budget Responsibility, Economic and Fiscal Outlook, March 2016! – HM Treasury 2016 Budget Report, March 2016