Health Experts Call For Ring-Fenced Health And Social Care Tax

A report on healthcare funding commissioned by the Liberal Democrats, the panel of experts, which includes former chief executives of NHS England, the Royal College of Nursing, and the Patients Association, has determined that the NHS in England needs a real terms funding increase of £4 billion in 2018-19 and further real terms increases of £2.5bn in each of the following two years.

In the short-term, the NHS funding gap could be bridged by an income tax increase. The Liberal Democrats have been calling for a penny on the pound in income tax to help fund the NHS. Longer-term, health and care funding should be brought together in a single ring-fenced tax to replace National Insurance, the report argues.

Other recommendations include:

  • Creating an Office for Budget Responsibility for Health
  • Introducing incentives to encourage people to save more towards adult social care
  • Additional revenue for local authorities to invest in public health
  • Reinstating the cap on the costs of adult social care

Liberal Democrat leader Vince Cable said:

“This specialist report provides some convincing answers on arguably the greatest domestic crisis facing the country: how to deal with the severe pressures on health and social care services. We must never again be in a position whereby funding is so short that more than 50,000 operations have had to be postponed over the course of a single month.”

“The health and care budget should be financed by an earmarked tax, which could replace national insurance. Many of those previously strongly opposed now accept that, in the case of the NHS, there is a strong argument for a form of ringfenced tax.”

Panel member Professor Clare Gerada, former chair of the Royal College of General Practitioners, said:

“At a time when the NHS and social care face such immense pressures, policy makers must be willing to look at bold solutions in order to safeguard vital services for generations to come.”

“Developing this report has been a welcome opportunity to explore ideas including the creation of a dedicated health and social care tax, which could help deliver the long-term funding that services desperately need. I hope policy makers of all parties will consider these recommendations seriously.”

Norman Lamb, Liberal Democrat and former health minister, also called for the establishment of a cross-party NHS and Care Convention, “that would engage with staff, patients and the public to come up with a plan for securing the long-term sustainability” of health and care services.

Data released in November last year indicated that the public would support tax rises to fund the NHS. In the YouGov poll, 50 percent of adults backed a one percent rise in National Insurance tax to increase public spend on the NHS, while 27 percent were opposed to the move and 15 percent undecided.

 

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