The Government claims that there is no crisis in the NHS: it is spending more money on the NHS than ever before. And in cash terms this is true.

True, but meaningless. Simply looking at the cash figures takes no account of:

  1. The way in which inflation diminishes the value of £1 over time;
  2. The growth in the population the NHS has to serve;
  3. The gradual aging of that population – since the very young and the very old need more healthcare than those in the young and middle age ranges;
  4. The increasing incidence of many conditions – e.g. mental health issues – which adds to the workload the NHS has to undertake.

The first three of these are relatively easy to correct for. The Office for National Statistics publishes inflation data and data on healthcare spending over time, so we can easily calculate real (i.e. inflation-adjusted) spending.

They also publish population data, so we can see how real per capita spend has changed.

Slightly more difficult is to correct for the impact of an aging population. But the relative need for healthcare has been assessed, so we can make a reasonable estimate also of age-driven workload for the NHS.

The results look like this.

Source: Office For National Statistics; 99% analysis

What the data show is this: the level of spending has kept pace with inflation – in fact it is slightly ahead of inflation. It has just kept pace with the growth in the population. It has not kept pace with the age-related growth in NHS workload. And if we could factor in the costs of keeping pace with rapidly rising obesity, asthma, mental health problems etc, the shortfall would be even more stark.

The data also shows that the rate of growth that the NHS normally needs to keep pace with all of these factors is much higher than we have seen since 2010.

As the Institute of Fiscal Studies put it,

“…a growing and ageing population will increase pressures [on public spending]. The ONS projects that the overall population will grow by about 3.5 million between 2010 and 2018, with the population aged 65 and over growing by 2.0 million. One implication of this is that, even if NHS spending were ‘protected’ and frozen in real terms between 2010–11 and 2018–19, real age-adjusted per capita spending on the NHS would be 9.1% lower in 2018–19 than in 2010–11.”

And the British Medical Journal estimated the cost in lives of this shortfall as a staggering 120,000 people.

With spending as it is today, it is undeniable that the NHS is in crisis.

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