Transcript Document

UK Health Spending, government spending and tax 1978-79
to 2016-17
60.0
50.0
40.0
30.0
20.0
10.0
0.0
health
other public services
welfare and debt interest
tax receipts
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The magic circle: health spending increases rapidly, overall
public spending and tax falls
Share of
GDP
Total Public
Spending
Health
spending
Other public Welfare and
services
debt
interest
Receipts
1978-79
45.1%
4.4%
25.9%
14.7%
40.1%
2007-08
40.7%
7.1%
20.3%
13.2%
38.6%
Difference
- 4.4
+2.7
-5.6
-1.5
-1.5
Source: OBR, HMT PESA 2012
In 2016-17 spending as a share of GDP and receipts as a share of GDP will
be at the average for the 20 years pre-crisis (40% and 38%).
2 key differences: Health spending will be much larger (2 percentage
points of GDP) and spending on other public services will be at the share
last seen in at the end of 1990’s.
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The impact on aggregate public spending
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Closing £13 billion Funding Gap: 2010/11 to 2014/15
£105
Funding pressures on the NHS in England
Funding pressures after for pay restaint
Funding (£billion in 2010/11 prices)
Funding pressures after pay restraint and
managing hospital activity for chronic conditions
£100
Pay
reduction:
£5bn
Funding pressures after pay restraint, managing
hospital activity for chronic conditions, and
productivity savings
Funding allocation based on 2010 spending review
Disease
management:
£3bn
£95
Acute QIPP
Actions: £4bn
£90
£85
2010/11
2011/12
2012/13
Year
2013/14
2014/15
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Initial Progress in 2011-12?
Expected
Actual
Difference
Emergency Admissions trend
5,784,376
5,411,015
-7%
Emergency Admissions with QIPP actions
5,648,234
5,411,015
-4%
Emergency Bed Days trend
39,639,520
35,600,921
-11%
Emergency Bed Days with QIPP actions
37,352,528
35,600,921
-5%
Planned Admissions trend
8,766,957
8,735,584
0%
Modelled Planned Bed Days
16,747,173
16,555,415
-1%
Planned Bed Days with QIPP actions
16,159,549
16,555,415
2%
OP Appointments
67,079,975
72,799,662
8%
OP Appointments with QIPP actions
62,572,388
72,799,662
14%
A&E Attendances trend
15,503,662
17,602,055
12%
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Variation in labour productivity at selected providers in
England: 2006/07 to 2011/12
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Percentage changes in spending by type of care:
2010/11 to 2011/12
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Closing £11 billion Funding Gap: 2014/15 to 2017/18
£105
Funding pressures after pay restraint, managing hospital
activity for chronic conditions, and productivity savings
Funding (£billion in 2010/11 prices)
Funding pressure after releasing all semi-fixed costs
from QIPP
£100
£95
Funding pressures after releasing all semi-fixed costs
from QIPP, and management of activity for chronic
conditions
Releasing semi-fixed
costs: £2bn
Funding pressures after releasing all semi-fixed costs
from QIPP, management of activity for chronic
conditions, and extension of pay restraint
Disease Management:
£2bn
Flat Real
Continued Pay
Restraint: £3bn
Remaining Gap:
£3bn
£90
£85
2014/15
2015/16
2016/17
2017/18
Year
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Earnings will be key
2011
2012
2013
2014
2015
2016
2017
Nominal
average
earnings
growth
2.2
2.7
2.2
2.8
3.7
4.0
4.0
GDP
deflator
2.7
2.3
2.0
2.0
2.0
2.0
2.0
Nominal
1.7
NHS pay bill
per head
growth
1.7
2.5
2.5
?
?
?
Source: OBR 2012, NHS employers 2012
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Conclusions
• From 2010/11 to 2014/15 the NHS faces its tightest budget of last 50
years.
• This period of austerity is likely to extend at least until 2017-18.
• Only a even larger cut in other public services or welfare or relatively
large tax increases would allow NHS funding to grow at historic levels.
1p extra on income tax raises around £4 billion a year.
• Without unprecedented productivity gains, there is likely to be a rapid
growth in the gap between the demand for care and the ability to
provide high-quality services.
• Although the NHS is delivering headline savings its not clear that it is
making the necessary progress on service productivity and models of
care.
• The scale of workforce cost growth after 2015 will be crucial.
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