The UK's National Health Service (NHS) is facing a period of unprecedentedly slow spending growth in the years following the next general election, according to a new report from the Institute for Fiscal Studies (IFS). The independent think tank projects that health spending will increase by just 1.4% per year on average between 2024-25 and 2028-29, a rate significantly below the long-term historical average and the growth seen over the past decade.
This forecast comes despite a substantial increase in health expenditure over the last 10 years, which saw an average annual real-terms growth of 3.6%. Much of this acceleration was a direct response to the COVID-19 pandemic, with funding surges aimed at tackling the immediate health crisis and its aftermath. However, the IFS highlights that even with this significant investment, key performance indicators for the NHS, such as waiting lists and emergency care targets, have yet to recover to pre-pandemic levels.
The analysis by the IFS suggests that the spending plans outlined by both the Conservative and Labour parties for the next Parliament would lead to similar tight financial conditions for the health service. While both major parties have committed to protecting the NHS, their current fiscal frameworks do not appear to allow for the level of sustained growth that has historically been required to meet rising demand and improve services.
A critical implication of these projections is the potential difficulty in addressing ongoing challenges within the health system. The IFS report indicates that achieving a substantial reduction in the NHS waiting list backlog, currently standing at millions, or making significant improvements to social care provision, would necessitate additional funding beyond what is currently budgeted by either of the main political parties. This could lead to difficult choices about service provision and resource allocation.
The report underscores the long-term pressures on health spending, driven by factors such as an ageing population and advances in medical technology. Without a more robust financial commitment, the NHS may struggle to adapt to these demographic and technological shifts, potentially impacting the quality and accessibility of care for millions of UK citizens.
Source: Institute for Fiscal Studies