IFS shows that the NHS needs more funds

analyses the future of public services

Image: Francis Tyers

After years of the austerity initiated by greater public desire for fiscal restraint within government, and elimination of the budget deficit in the wake of the 2007/8 financial crash and subsequent recession, public services in Britain are creaking under the combined weight of chronic underfunding and the increasing needs of an ageing population. The perpetual crises within the NHS, social care, and the education system encapsulate the struggles of those state funded services yet to be fully privatised. From analysis by the IFS, the population aged 65 and over is expected to grow three times quicker than the population as a whole, while the healthcare costs of a 70-year-old are three times greater than those of a 30-year-old. Clearly, major increases in funding, particularly in pensions and health and social care, are necessary to ensure the swelling demand is met. However, NHS spending is projected to fall by £600m in real terms by 2021, emblematic of the wilful ignorance towards this problem on the part of the government.

The severity and duration of the government’s contractionary fiscal policy has already chipped away at the quality of the provision of essential services to the point that it is having serious consequences for public welfare, offsetting the gains in living standards which a strong and stable economy is supposed to bring. NHS waiting times and indicators of performance are worsening, while record numbers leave vital professions such as teaching and nursing as the workload and the compensation for it slide in opposing directions.

Since the financial crash British living standards have deteriorated, represented by a decline in real wages of 10.4 per cent, superior only to depression-ravaged Greece among the 36 OECD countries, compounded by the prolonged period of brutal cuts. That this has occurred alongside years of consistent growth in GDP and employment demonstrates how unequally the fruits of Britain’s recovery have been distributed towards the wealthiest one per cent and multinational corporations. Exacerbated by the Conservative government’s potential tumble towards a hard Brexit to fulfil their vision of a low-tax, lowregulation ‘Singapore-on-Thames’, these patterns reinforce the need for properly funded public services to prevent these inequalities becoming evermore entrenched.

Under a Conservative government this austerity is likely to persist, and the most severe consequences will be felt greater yearon-year. The NHS will be unable to provide for the unprecedented numbers needing treatment. Children will routinely share their classroom and teacher with over 40 of their peers. The creeping roots of privatisation will sink in as it becomes a necessity for those fortunate enough to be able to afford it, as social mobility becomes a forgotten relic of days gone by.

In any measure of a country’s true development, the manner in which it educates its children, cares for its sick and elderly, and presents equal opportunities to each citizen is as important as its economic output. The pretence that these objectives are mutually incompatible, as is the trend, is also a fallacy: the benefits to innovation and competitiveness of a healthier and better educated nation far outweigh the consequences of any requisite increase in government spending.

This is not a plea for a large increase in state intervention in the economy. It is merely that those in power recognise that it is in Britain’s interest that our public services are protected and given the necessary resources to ensure the British people are universally awarded the levels of care and opportunity that should be expected in one of the world’s wealthiest countries.

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