The spending review takes place on 26th June and calls to rethink the “ring fence” and the funding of the National Health Service are being heard frequently. If newspaper reports are to be believed, these calls are coming from government ministers.
Given the NHS’s special status, and the political risks associated with cuts, it is a risky debate, but one that is grounded in straightforward financial arithmetic.
That arithmetic is striking. If the Chancellor goes ahead with cuts for 2015-16 (the year this spending review covers), which broadly keep to the same trajectory we have seen over this parliament, then a set of departments—local government, justice, environment and business —will have seen cuts of around 30 per cent since 2010. It is worth dwelling on that fact. It means that for every £10 that the government was spending in these areas in 2010 it will be spending only £7 in 2015. These are dramatic cuts by any standard.
At the same time the health budget will not have fallen at all. Spending on international development will have risen by around 30 per cent. The bill for the NHS in England alone is £100bn. It is the protection afforded to health, not the big increase for international development, that affects what is available for other departments.
Another way to see this is to say that, in 2009-10, English NHS spending represented just over a quarter of total public service spending. On current plans it will account for nearly a third of public service spending by 2015-16. That is a remarkable statement of priorities.
Given that further spending cuts are planned for at least the two years after 2015-16, continued protection of the NHS will see its share of the total rise further still.
So why not cut the NHS? This is not an option that has been eschewed in all parts of the UK. The Welsh assembly government cut spending on health in Wales and has been able to reduce cuts elsewhere.
On the other hand a real freeze on health spending is tougher than it may sound. We are in the middle of the tightest four-year period of spending control in the NHS in the last 50 years—there has been no four-year period since the 1950s in which health spending has not grown in real terms. Even with protection for the NHS, there will be a seven-year period of no…