UK’s healthcare black hole to be filled with £5.4bn rescue package

Prime Minister Boris Johnson has announced a £5.4 billion ($7.47bn) rescue package for the National Health Service (NHS) amid warnings the UK’s health system is at breaking point.

Long treatment delays due to the Covid-19 outbreak and staff shortages have led to experts warning services may need to be cut unless the NHS receives an extra £10bn of funding.

It comes days after a joint report by NHS Providers and the NHS Confederation, which represent front-line workers, revealed the full scale of the extra running costs needed by the NHS in light of the pandemic.

“Patients genuinely are at peril” without “crucial” funding, they warned in a statement.

The report said the pandemic has increased the cost of running frontline NHS services by £4bn-£5bn a year.

“These costs are in addition to other key financial factors, such as the need to fund capital investment and recover care backlogs,” it said.

“In 2020/21 the costs of treating Covid-19 patients, combined with the knock-on frontline costs described above, totalled £7.8bn.

“Although vaccines are currently breaking the link between infections, hospital admissions and deaths from the virus, living with Covid-19 long term and dealing with even low levels of hospital admissions means that, for some years to come, frontline services will continue to be more expensive to provide than they were before the pandemic.

“Our estimate, based on the above, is that the NHS England 2022/23 budget needs to increase by around £10 billion to cover ongoing Covid-19 costs (£4.6 billion); recover care backlogs (£3.5-4.5bn); and make appropriate allowance for lost efficiency savings.

“It is vital that the government provides this resource. If it fails to do so, it will inevitably become harder for patients to access the care they need, when they need it, and for the NHS to provide the right quality of timely care to all who require it.”

The layouts of hospitals have had to be overhauled due to the pandemic and employee sickness levels have led to a staffing crisis.

Waiting lists have also hit record levels during the pandemic and 5.4 million people are currently waiting for hospital treatment in England.

In a recent survey 43 per cent of nurses claimed they were considering leaving their jobs.

The Healthcare Workers' Foundation said the results are “upsetting".

“We believe much more needs to be done to improve working conditions for NHS staff,” they said.

Mr Johnson announced the additional funding on Monday following a weekend of meetings with Chancellor Rishi Sunak and Health Secretary Sajid Javid.

"The NHS was there for us during the pandemic - but treating Covid patients has created huge backlogs," he said.

"This funding will go straight to the frontline, to provide more patients with the treatments they need but are not getting quickly enough.

"We will continue to make sure our NHS has what it needs to bust the Covid backlogs and help the health service build back better from the worst pandemic in a century."

Mr Johnson is set to unveil long-awaited social care reforms later this week, which are reportedly set to be financed through an increase in National Insurance taxes — despite him making an election pledge not to raise taxes. This has already led to a backlash among politicians.

Former chancellor Lord Hammond told Times Radio raising taxes would cause the party “significant damage” at the polls.

“An increase in National Insurance contributions is asking young working people to subsidise older people who've accumulated wealth during their lifetime and have a property. On any basis, that has got to be wrong,” he said.

“I think that if the government were to go ahead with the proposed increase in National Insurance contributions, breaking a manifesto commitment in order to underwrite the care costs of older people with homes, I think that would provoke a very significant backlash.

“Economically, politically, expanding the state further in order to protect private assets by asking poor people to subsidise rich people has got to be the wrong thing to do.”

Tax and spending think tank, the Institute for Fiscal Studies (IFS), on Monday said increasing National Insurance by one percentage point would raise around £10 billion a year.

It said only 1.4 per cent of the taxes would come from a quarter of UK households because, unlike income tax, those aged over 65 do not pay national insurance.

Under the government plans, the burden would fall more on lower earners.

The IFS said if income tax was raised instead, those households exempt due to age would face paying 10 times more and would potentially contribute 13.8 per cent of the total revenue raised.

Opposition Labour leader Keir Starmer said his party opposed the move to raise taxes.

“This way of doing it simply hits low earners; it hits young people and it hits businesses,” he told the Daily Mirror.

Backbencher Jake Berry, who leads a block of northern Conservatives, told BBC Radio that he thinks it is unreasonable for low earners to support wealthier pensioners.

“I personally just don’t believe that an increase in national insurance is a fair and equitable way of doing it,” he said.

“I would prefer a conversation with the government about increases in income tax, other business taxations, to look at properly funding the system.”

Downing Street and the Treasury declined to comment on what they called “speculation”.

“We’ll set out details on our long-term plan to reform the social care system and resolve a decades-long issue in due course,” Mr Johnson’s office said in a statement.