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Knowledge Hub

May’s NHS cash boost will require tax increase

Where will the money come from for the Prime Minister’s NHS fund injection?


Prime Minister Theresa May will have to break her own budget rules if she plans to mark the NHS’s 70th anniversary in July with a meaningful cash boost, according to two think-tanks.


In their joint report, Securing the future: funding health and social care to the 2030s, the Institute for Fiscal Studies (IFS) and the Health Foundation say that more cash would need to come from increased taxes or reduced spending in other areas.


In March, Mrs May told the House of Commons Liaison Committee that she would formulate a long-term plan for the NHS before the next financial year. Many commentators expect an announcement before the NHS’s 70th anniversary.


The institute’s report says that the government wants to balance its books by the middle of the 2020s, despite heading for a £21bn deficit for 2022/23. This would assume cuts of £5bn between now and then further cuts to working-age social security benefits.


IFS says that spending on the Department of Health and Social Care needs to increase by 3.3% a year to maintain current provision. To improve services requires an increase of at least 4% (or £21bn) the government would have to borrow more, or cut spending to other departments by £26bn, or increase taxes.


Further information

Institute for Fiscal Studies: Securing the future: funding health and social care to the 2030s

The Health Foundation: NHS at 70: No more caution — we need tax rises and more spending

UK Parliament: Theresa May’s evidence to the House of Commons Liaison Committee, 27 March 2018