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The Bonds Keeping The NHS Intact Are At Breaking Point - Here's Two Ways To Address The Funding Black Hole

22/11/2016 07:55
Dan Kitwood via Getty Images

The NHS is the one institution created by the Attlee Government to which the British public still feel an unbreakable bond. And yet the bonds that keep the NHS itself intact are at breaking point.

The National Audit Office today became the latest organisation to lay bare the real and growing threat the health service's financial woes pose to its very existence beyond 2020. Its combined financial deficit has trebled in a year and is likely to reach upwards of £30billion by the end of the decade.

This eye-watering figure does not take into account the equally large threat facing the future of social care services. The noble efforts of frontline NHS staff can only go so far to compensate for this financial black hole. Indeed, the symptoms of this funding crisis are as clear as day.

An elderly constituent of mine was waiting on a trolley for five hours, and noticed eight other patients in a similar situation, before being seen in A&E. Another elderly resident was told they would need to wait over a year-and-a-half for a hip operation.

Likewise telephone booking systems for GP appointments are becoming overloaded, with some of my constituents finding it difficult to get through and then having to wait several weeks for an appointment.

The Government has offered the health service some extra monies, and invited local authorities to do likewise for social care services, but this offer falls far short of the demands that will be placed upon the service by health inflation. Likewise, the offer is conditional upon the service itself delivering some incredibly tough efficiency savings.

Were it to act immediately by making health and social care services a bolder offer, the Government would be going well and truly with the grain of voters' wishes. Crucially, though, the offer would need to be made through the National Insurance system, rather than income tax.

For voters make a clear distinction between paying National Insurance contributions towards known priorities, and having their income taxed only for politicians to decide how those taxes are spent.

So the solution to the funding crisis, which has put the health service on life support, is twofold. First, the intensive care will require an immediate penny increase in National Insurance contributions. This will help the Government plug the black hole in NHS coffers over the next five years.

A second, longer-term treatment will necessarily involve a whole new governance arrangement between the NHS, social care services, voters, and politicians.

I have proposed the creation of a new National Health and Social Care Mutual - if we were designing the NHS from scratch today, we would not exclude social care - whose governing Trustees would be elected by citizens who qualify through their National Insurance contributions.

The Trustees' duties would include forecasting the demands likely to be placed on health and social care services, setting a budget with which the services can meet those demands, and raising the necessary National Insurance contributions for that budget. Likewise they would need to maintain an ongoing dialogue with the service staff themselves, as well as voters, on what kinds of technologies, treatments, and drugs should be available through the services, and what shape the services should take to meet patients' needs.

The Mutual's main function, though, would be to safeguard a hypothecated pot of National Insurance contributions, raised from a new, progressive system as opposed to the current one, to ensure that politicians cannot get their sticky fingers on new monies that are earmarked for health and social care services.

The pot would gain its first tranche of funding from the penny increase, and I propose that with each tranche of funding transferred into this pot - raised on a progressive basis and eventually covering the entire health and social care budget - the Government should cut the basic rate of tax. This will avoid any prospect of double taxation.

These two moves offer the Government a realistic chance of strengthening not only the bonds that keep the NHS together, but also the bonds between the NHS itself, social care services, and the British public - the public would own their national health and social care service and be in a position to shape the next stage in its life.

Frank Field is the Labour MP for Birkenhead

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