May unveils HUGE £25bn funding boost for struggling NHS

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Theresa May warned that the NHS needs more than a ‘sticking plaster’ today as she unveiled a huge £25billion funding boost.

The Prime Minister pointed to the care given to terrorism victims and her own experience of coping with diabetes as she vowed to turn on the spending taps over the next five years to improve services.

But Mrs May admitted that a claimed ‘Brexit dividend’ will not cover the whole sum and taxes will have to rise – with experts warning that working families could face stumping up an extra £10billion a year.

The Institute for Fiscal Studies (IFS) said the Treasury could be forced to make households pay up to £2,000 more by 2033.

The respected body said raising National Insurance by 1p for workers and employers could pull in £8billion.

Almost £2billion more could be brought in by freezing the thresholds for the personal income tax allowance at the basic and higher rates – potentially dragging thousands more people deeper into the tax system.

Brexiteers including Boris Johnson have hailed the funding move – announced in a keynote speech at the Royal Free Hospital in London today – as a ‘downpayment’ on the money currently being sent to Brussels

However, the idea that leaving the EU will free up any resources has been branded ‘tosh’ by Tory Remainer MPs. 

Delivering her speech at the Royal Free Hospital in north London this afternoon (pictured), Mrs May said that in return for the injection of cash the NHS must crack down on waste

Delivering her speech at the Royal Free Hospital in north London this afternoon (pictured), Mrs May said that in return for the injection of cash the NHS must crack down on waste

Theresa May chatted to staff at the Royal Free Hospital before delivering her speech today

Theresa May chatted to staff at the Royal Free Hospital before delivering her speech today

The Prime Minister even stopped to sign the leg cast of Jade Myers, 15, during her visit

The Prime Minister even stopped to sign the leg cast of Jade Myers, 15, during her visit

In her speech today Mrs May heaped praise on the staff who keep ‘our NHS’ going today, saying the service ‘reflects the values’ of Britain.

How tax will rise to pay for NHS boost: The six main ways £25bn is likely to be raised 

The NHS funding boost could mean thousands more workers must be pulled into the tax system – or face bigger bills.

The Institute for Fiscal Studies (IFS) has dismissed the idea that there will be a ‘Brexit dividend’ over the coming years – setting out several tax rises that could be used instead.  

There are six main ways the money could be found by Chancellor Philip Hammond at the Budget later this year: 

1. Income tax: Adding a penny to the rate of income tax would raise £5billion a year

2. National Insurance: A 1 per cent hike to National Insurance contributions paid by workers, the self-employed and employers would net the Treasury about £9.9billion 

3. Corporation tax: Labour has promised to unwind deep cuts to corporation tax introduced since 2010, bringing £18billion back to the Treasury

4. Personal Allowance: Freezing the personal allowance in 2020 – when it is due to be £12,500 – would raise £1.8billion. Cutting the basic rate allowance by £1,000 a year would raise £5.8billion.

5. Rich people: Separate research by former Tory minister David Willetts calls for a new inheritance tax system raises billions from the wealthy 

6. Borrowing: If none of the above options are politically palatable or possible, the Chancellor can always borrow more money  

Signalling a drive to slash waste and red tape, she conceded that despite consistent above-inflation budget settlements the UK’s ‘crowning achievement’ was under threat from surging demand for treatment.

‘We cannot continue to put a sticking plaster on the NHS budget each year,’ she said. 

‘So we will do more than simply give the NHS a one-off injection of cash.’  

Mrs May said the funding that would no longer be sent to the EU would help fill the gap.

But she insisted the commitment she was making ‘goes beyond’ that and resources would be allocated ‘in a responsible way’ at the Autumn Budget.

Grilled by reporters, she conceded that people would have to pay a ‘bit more’ tax to support the funding splurge.

‘Across the nation, taxpayers will have to contribute a bit more in a fair and balanced way to support the NHS we all use,’ she said.

Outlining how the overhaul could be paid for, Carl Emmerson, deputy director of the Institute for Fiscal Studies, said: ‘If the Chancellor is taking his deficit target seriously, it would not be a surprise to see a £10 billion tax rise. 

‘A tax rise of that magnitude would lead to many working families paying more.’   

Earlier, Health Secretary Jeremy Hunt quashed hopes that spending could be raised without punishing workers – saying bluntly that ‘there will be an increased burden on taxation’ .

He also risked inflaming a bitter row between Tory Remainers and Eurosceptics by admitting the ‘dividend’ from leaving the EU will not be ‘anything like’ the sums being pumped into the NHS. 

The PM gathered Cabinet earlier to discuss the plans before making her long-awaited speech – which marks the 70th birthday of the NHS.

Mrs May said the NHS budget will be expanded by £25billion by 2023.

Spending on NHS England will rise £20billion a year, while the Scottish government will be given an extra £2billion and Wales will receive £1.2billion – along with hundreds of millions for the health service in Northern Ireland.

In a surprise additional boost, a further £1.25billion will be allocated each year to  relieve NHS pension deficits.

Mrs May claimed a chunk of the money would be coming from a so-called ‘Brexit dividend’ – but the possibility has been rubbished some Tory Remainers.

Pressed on the prospect after her speech today, Mrs May said: ‘It’s very simple: we are not going to be sending the vast amount of money every year to the EU that we spend at the moment on the EU as a member of the European Union.’

The funding boost will still mean growth in NHS budgets is lower in real terms than under the Blair and Brown governments

The funding boost will still mean growth in NHS budgets is lower in real terms than under the Blair and Brown governments

Funding for NHS England is now due to rise dramatically in real terms over the coming years. Health services in Scotland, Wales and Northern Ireland will also get more money in proportion to the hikes

Funding for NHS England is now due to rise dramatically in real terms over the coming years. Health services in Scotland, Wales and Northern Ireland will also get more money in proportion to the hikes

‘That money will be coming back and we will be spending it on our priorities – and the NHS is our number one priority.’

She acknowledged payments to the EU would continue under the terms of the Brexit divorce settlement ‘but there will still be more money coming back from the EU and our priority for that is the NHS’.

In a round of interviews this morning, Mr Hunt said there will not be any detail of where the money is coming from until the Budget in the Autumn.

What is the row over the Brexit dividend about?

The Prime Minister (pictured on a visit to Frimley Park hospital this month) has claimed a Brexit dividend will help boost NHS spending

The Prime Minister (pictured on a visit to Frimley Park hospital this month) has claimed a Brexit dividend will help boost NHS spending

Theresa May has said the money Britain keeps when the country quits the EU – known as the Brexit dividend – will go towards funding the NHS.

In the referendum, Brexiteers including Boris Johnson said the windfall  would equate to £350million a week.

Vote Leave plastered the number on the side of a red campaign bus and suggested the money be pumped into the NHS. The PM is saying she is making good on that pledge.

But the whole notion of a Brexit dividend is controversial and has been rubbished as ‘tosh’ by its critics – including Mrs May’s own MPs.

Economist Paul Johnson, of the Institute for Fiscal Studies, said any dividend will be wiped out by slower growth and lower tax revenues.

And he also pointed out that when Britain leaves the EU the country will go on paying vast amounts of money to Brussels as part of the Brexit divorce bill.

So while the UK will stop paying the annual £9billion, the country will still have a £39bn for years to come. 

And the Health Secretary Jeremy Hunt risked inflaming the row by admitting the ‘dividend’ will not be ‘anything like’ the £25billion being pumped into the NHS.  

But he added: ‘A lot of thinking has gone on at the Treasury to make absolutely sure this can be afforded. We are clear that there will be an increased burden of taxation.’ 

He said one sources for extra money was ‘the fact that we won’t be paying subscriptions to Brussels by the end of this period’.

‘But that alone won’t be anything like enough, so there will also be more resourcing through the taxation system, and also through economic growth,’ he told BBC Radio 4’s Today programme. 

In her speech, Mrs May pointed to her own reliance on the NHS after she was diagnosed with Type 1 diabetes.

‘I would not be doing the job I am doing today without that support,’ she said.

Mrs May signalled some of the coalition’s health service reforms could be unwound, saying staff were spending too much time on bureaucracy instead of patient care.

The PM said the reforms must deliver better integration between services. 

She said: ‘It must also make it easier to break down the barriers between different organisations to deliver integrated patient-focused care so people don’t feel like a pinball in a machine bounced from one part of the system to the next, explaining to the next healthcare professional what they just said to the previous one.’ 

Mrs May said improving mental health services was a ‘personal priority’ and reforms must be ‘even more innovative and more ambitious’ to ensure care catches up with the rest of the NHS. 

She added: ‘This could include attracting more of the best graduates into the mental health professions; or finding new ways to provide joined-up care in the community, or helping people to manage their conditions so they do not reach a crisis point. 

‘It must be supported by sustained investment that reaches the frontline of mental health services and staff. 

‘For too long we have had one expectation for minimum waits and eligibility for care when we have a physical condition; and another entirely in mental health.’ 

In return for the extra funding, Mrs May asked the NHS to produce a ten-year plan later this year that includes significantly improving access to good mental health services and cutting waste.

She warned there cannot be a repeat of the increases in NHS spending under New Labour, when she said nearly as much as half of the money failed to get to frontline staff to improve patient care.

She said: ‘This must be a plan that ensures every penny is well spent. It must be a plan that tackles waste, reduces bureaucracy and eliminates unacceptable variation, with all these efficiency savings reinvested back into patient care.

Mrs May laughed and joked with Ms Myers before signing her cast at the hospital visit today

Mrs May laughed and joked with Ms Myers before signing her cast at the hospital visit today

The premier was accompanied by Health Secretary Jeremy Hunt before her speech today

The premier was accompanied by Health Secretary Jeremy Hunt before her speech today

Brexiteers including Boris Johnson have hailed the NHS move as a 'downpayment' on the funds sent to Brussels

Brexiteers including Boris Johnson have hailed the NHS move as a ‘downpayment’ on the funds sent to Brussels

Ms Wollaston said the suggestion that a Brexit dividend will fund the NHS uplift is nonsense

Ms Wollaston said the suggestion that a Brexit dividend will fund the NHS uplift is nonsense

Jeremy Hunt (left in Downing Street today) has made clear that taxes will have to rise to increase funding

Theresa May (pictured arriving at Downing Street this morning) is giving a keynote speech to mark the NHS's 70th birthday

Theresa May (pictured right arriving at No10 this morning) is giving a keynote speech to mark the NHS’s 70th birthday. Jeremy Hunt (left in Downing Street today) has made clear that taxes will have to rise to increase funding

‘It must be a plan that makes better use of capital investment to modernise its buildings and invest in technology to drive productivity improvements. It must be a plan that enjoys the support of NHS staff across the country – not something dreamt up in Whitehall and centrally imposed.’

There have been high-profile examples of NHS waste in recent years. For instance, one hospital was found to be spending £16.47 on a pack of 12 rubber gloves, while another spent 35p. On toilet roll, some hospitals pay 67p per roll, others pay just 34p.

How the NHS budget is due to rise in real terms 

The government is pledging years of rises for the NHS on top of inflation.

Here is the schedule for how budgets will rise.

2019-20 – 3.6%

2020-21 – 3.6%

2021-22 – 3.1%

2022-23 – 3.1%

2023-24 – 3.4% 

An estimated £1billion a year is wasted because patients are not showing up for hospital appointments, £26million a year is spent on prescriptions for gluten-free food even though it can be bought from supermarkets, and £1.5billion a year is spent on agency nurses. 

In an emotional tribute to NHS staff, Mrs May said: ‘I will never forget visiting the Royal Manchester Children’s Hospital in the aftermath of the Manchester Arena attack. There, in the face of the very worst that humanity can do, I witnessed first-hand, the very best.

‘Doctors and nurses working 24-hour shifts to treat the injured. Surgeons who were off-shift, dropping everything to come in and perform life-saving operations.

‘Paramedics who had risked their own lives to get others to safety. In every instance, I was struck not only by the medical expertise of the staff, but the compassion with which people were treated. This is our National Health Service.’  

Dr Sarah Wollaston, who chairs the Commons health and social care committee, yesterday criticised her party leader for bucking to ‘populist arguments’ on Brexit.

She tweeted: ‘The Brexit dividend tosh was expected but treats the public as fools. 

‘Sad to see government slide to populist arguments rather than evidence on such an important issue. 

The UK is mid-table when compared to other countries for what proportion of GDP is spent on the health service

The UK is mid-table when compared to other countries for what proportion of GDP is spent on the health service

An estimated £1billion a year is wasted because patients are not showing up for hospital appointments while £26million a year is spent on prescriptions for gluten-free food

An estimated £1billion a year is wasted because patients are not showing up for hospital appointments while £26million a year is spent on prescriptions for gluten-free food

Real spending on the NHS has risen dramatically as a proportion of GDP over the decades

Real spending on the NHS has risen dramatically as a proportion of GDP over the decades

Northern Ireland Secretary Karen Bradley (right) and business minister Claire Perry also attended Cabinet today

Northern Ireland Secretary Karen Bradley (right) and business minister Claire Perry also attended Cabinet today

Defence Secretary Gavin Williamson

Brexit Secretary David Davis

Defence Secretary Gavin Williamson (left) and Brexit Secretary David Davis (right) were among the ministers at the Cabinet meeting this morning ahead of the speech

Mr Johnson, pictured at a UN meeting in Switzerland today, has insisted there will be a Brexit dividend for the NHS

Mr Johnson, pictured at a UN meeting in Switzerland today, has insisted there will be a Brexit dividend for the NHS

‘This will make it harder to have a rational debate about the ‘who and how’ of funding and sharing this fairly’. 

Asked about the plans by journalists as he attended a UN conference in Switzerland today, Mr Johnson said: ‘I think it is, as the prime minister has rightly said, a downpayment on future receipts that will come to this country as a result of discontinuing payments to Brussels.’

Why is there a crisis in social care and what are the solutions being debated?

Theresa May dodged questions about her plans for overhauling social care today.

The Prime Minister accepted that the issue needed to be put on a more ‘sustainable footing’. 

But she merely stated that the government would ‘come forward with proposals’ at a later stage. 

The question of how to fund care for Britain’s ageing population has proved politically toxic for years.

A failure to provide enough care for the elderly either in their own homes or in care homes means patients get stuck on hospital wards – a major reason the NHS is creaking.

The average person needs £20,000 worth of care in their lifetime – but 10 per cent of people need much more, with conditions lasting decades costing over £1million. 

The state currently only funds people with assets worth less than £23,350, leaving many people dependent on the NHS. 

Fixing the problem will require billions of pounds but there is no political agreement on what to do.

Mrs May was forced into an embarrassing U-turn on the issue during the general election campaign last year.

The Tory manifesto proposed people should not have to pay bills during their lifetime but then fund them from their estate after death – with a guarantee they could keep at least £100,000 to pass on.

But the plan was derided as a ‘dementia tax’ because there was no cap on what people would have to pay – meaning those with degenerative conditions could face much higher bills than those who only become ill at the end of their lives.

In 2010, the Coalition Government asked Sir Andrew Dilnot to investigate how to solve social care. He recommended each individual with assets worth more than £100,00 be asked to pay up to £35,000 in care costs before the state took over – intending the cap to create a new market in insurance. 

The proposal was never implemented but generated huge debate over the level at which a cap could be fairly set.  

The deal was decided on Friday afternoon between Mrs May, health secretary Jeremy Hunt, Chancellor Philip Hammond and the chief executive of NHS England Simon Stevens.

Mr Hunt admitted today that the negotiations within government had ‘gone to the wire’ – and there appears to have been only broad agreement on where the money will come from. 

A source told The Times: ‘By the end of the meeting, some sources of funding had been more heavily pencilled in than others.’

Plans to raise money from freezing all personal allowance and national insurance thresholds at the end of the parliament could raise nearly £4billion. 

Borrowing could account for £8billion to £10billion.

But there is significant resistance to plans to defer corporation tax rate cuts, which could free up another £6billion for the government.

That is thought to leave a potential £11billion black hole where the source of the funding is unclear. 

Economist Paul Johnson, of the Institute for Fiscal Studies, dismissed Mrs May’s claim about a Brexit dividend, saying this would be wiped out by slower growth and lower tax revenues.

He said the so-called windfall from EU withdrawal would not materialise when the UK stopped paying more than £9 billion a year to Brussels due to the ‘divorce bill’ of some £39 billion, and other economic factors.

Labour, which said it would match the Tory funding proposals if in power, called on Mrs May to set out details of how her plan would be paid for.

Shadow health secretary Jonathan Ashworth said: ‘The money announced today by the prime minister is not enough to save our NHS after eight years of Conservative austerity.

‘Although she confirmed the current situation is not sustainable, today’s figures represent little more than a standstill in funding, according to experts.

‘People are waiting longer and in pain because of Tory cuts to the NHS. The prime minister couldn’t say today when this will improve and waiting lists will come down.

‘She also confirmed that social care, capital spending and public health will not see any increase as a result of today’s announcement.

‘If the Conservatives do manage to publish the detail of their insufficient 3.4 per cent increase, then Labour’s fully costed plans to raise taxes for the top 5 per cent and big business will top up NHS spending growth to around the 5 per cent which is needed.’ 

What type of diabetes does Theresa May have and when was she diagnosed?

Theresa May pointed to her own experience today as she outlined ambitious plans to boost funding for the NHS.

The PM said she could not do her current job without help from the health service – after she was diagnosed with diabetes in November 2012.

The then Home Secretary has told how she put ‘classic’ symptoms, including weight loss, down to work pressure for a long time before finally visiting the GP.

‘That summer was the Olympics, so life was in a different order,’ she said in 2014. ‘There was a lot more going on, so I didn’t really notice.’

Mrs May was initially told she had Type 2 diabetes and ordered to take tablets. However, doctors then decided she actually had Type 1, and requires insulin injections up to five times a day.

Mrs May told Diabetes UK: ‘I hadn’t appreciated the degree of management it requires and I hadn’t appreciated, for example, the paradox that while everyone assumes diabetes is about not eating sugar, if you have a hypo, then you have to take something that’s got that high glucose content.’

The PM has been seen wearing a special diabetes patch.

The device, worn on the upper arm, continuously monitors glucose levels. 

Results can be read using a device which scans through clothing, reducing the need for finger-prick blood tests.  

 

 

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