This morning was the launch of the Resolution Foundation report, Healthy finances? Options for funding an NHS spending increase – a response to the rumoured government “birthday present” for the NHS as it turns 70 on 5 July 2018.
The audience included party advisers (I spotted a Whatsapp group chat for a party’s comms team), people from various think-tanks, academics (including an Emeritus Professor from Imperial who had a lot to say), and a representative from at least one (non-militant, at least in the room) campaigning group.
The line up:
- Sarah Wollaston MP, Chair of the Health Select Committee and medic who worked as a GP up until 2010. (Given her generally sensible views, I keep having to remind myself that she’s a Tory).
- Jon Ashworth MP, Shadow Secretary of State for Health, who has a long history as a Labour professional, including as Special Adviser in the Treasury for Gordon Brown.
- Ben Page, Chief Executive of Ipsos MORI and fellow of the Academy of Social Sciences.
- Matt Whittaker, Deputy Director at the Resolution Foundation, who previously worked for the House of Commons Library where he provided stats and economics advice.
The event was chaired by Torsten Bell, Director of the Resolution Foundation, former adviser to Ed Miliband (and, incidentally, architect of the Ed Stone).
Interlude: What is the Resolution Foundation?
The launch was set at Resolution HQ in a bright, wide room, with cosy luxurious seats which wouldn’t be out of place in an up-market indie cinema, so I was curious who they are and how it’s all funded.
Resolution Foundation’s website describes it as “a non-partisan and award-winning think-tank that works to improve the living standards of those in Britain on low to middle incomes.” In their most recent annual report, they defined “low to middle” as those in income deciles 2 to 5, whom they say are overlooked in policy debates. Their focus is on working households.
They receive most of their funding via donations from Resolution Trust, founded by Clive Cowdery with a £50m donation, “believed to be one of the largest endowments for public policy research made in the UK”.
Cowdery made his wealth from “sponsoring insurance vehicles” (an FT article says more) and is also founder of financial services investment firm called (again) Resolution.
Resolution Trust backs Prospect Magazine and, intriguingly, WorkerTech, which seems to be about encouraging alternatives to trade unions for the precarious world of Uberified work. (Here are slides from its launch.)
What did they say on health funding?
All agreed that the NHS needs more funding, so the question is how much more funding and where the money is coming from. The issue was framed as a tug-of-war between Treasury and Jeremy Hunt (with Hunt wanting more money, in case not clear – it’s not always obvious), constrained by a complex parliament and a wish to keep voters happy.
Matt Whitaker took us through some headlines from the Resolution report, emphasising that it was a prediction of what the government was likely to announce rather than what it should do. (Though it sounded very much like advice.)
Borrowing was seen as likely necessary, so long as the total was below 2% of the projected GDP in 2020-21 (to meet a Tory fiscal target). But borrowing alone would not suffice, so some sort of tax raise is almost certainly on the cards – the problem is how to keep keep Tory voters and donors on side, whilst getting it through parliament.
One possibility is increasing National Insurance contributions (or NICs, pronounced “nicks”), which Gordon Brown did when he was chancellor. This is a progressive tax for workers; however, increased NICs was seen by the report authors as “unfair from a generational perspective” since older people who rely more on healthcare don’t pay national insurance (this generational perspective might need some analysis). A solution proposed was to extend NICs to include those above state pension age who are still working.
Increasing income tax could be another way to get the money. LibDems and SNP might support this, and Scotland recently introduced a change to its tax bands meaning some pay more and others pay less tax. Labour, the authors argue, would likely oppose increases for anyone earning under £80k and some Tory MPs might oppose too.
Another approach suggested was to adjust thresholds for (i) when income tax is payable and (ii) the higher rate of payment. Threshold changes were Tory manifesto promises, but the authors suggest a fiddle (p. 24):
“An alternative approach would be to lift the Income Tax thresholds to those pledged in the manifesto in 2020-21, but to freeze both them and the NICs thresholds in the final two years of the parliament. This would of course cost money in 2020-21, but by 2022-23 it would raise £3.7 billion relative to the default of uprating in line with inflation every year.”
Another promising source of funding would come from reversing George Osborne’s 2016 pledge to cut corporation tax by 2020. This tax uncut could provide £5.2 billion in 2020-21 and £5.7 billion by 2022-23. Other political parties would likely support the move and the authors argue (p. 27):
“The Chancellor might also feel emboldened to act given the way in which the estimated costings of the move from 19 per cent to 17 per cent have shifted since George Osborne first announced it.”
Remarkably little was said about Brexit. Will it torpedo all the projections and render the suggestions (sorry, predictions?) unimplementable? The exception was Sarah Wollaston, who noted that she never believed the infamous £350m bus claim; she expressed reasonable worries about the effects Brexit would have.
What might more money mean for mental health?
Although the focus was very much top-level – where’s the money? – speakers did say a little about how it should be spent. For instance, Jon Ashworth quoted numbers on additional doctors and nurses required (it’s thousands), citing a report from IFS – also cited by Sarah Wollaston.
Reassuringly, mental healthcare was mentioned a few times as being important and in need of improvement (though note the history of “warm words”). Ben Page cited public support for increased spending, with mental health being second on the list in an April Ipsos MORI survey of priorities, after Accident and Emergency. Jon Ashworth mentioned improving support for addictions, in particular.
Sarah Wollaston cited the Health and Social Care Committee’s report into integrated care, published yesterday, which discusses detailed contractual changes needed to improve how, e.g., mental healthcare integrates with other services, including discussion of accountable care organisations (ACOs). (Perusing this report just now highlights how difficult it is to have public debates on these issues – it’s technical stuff.)
The coming weeks as we approach July 5th would be a good time to campaign for key specifics on how much money mental healthcare should receive and what it should be spent on. If the NHS received £20 billion more in 2022-23, how much should go to mental health and where?