Impact of leaving EU on NHS finances
11 July 2016
- Lower than predicted economic growth if the UK leaves the EU would impact the money available to public services
- The budget for the NHS in England could be £2.8bn lower outside Europe, assuming the UK joins the EEA and the NHS takes an equal share of reduced finances
- This would be a real terms reduction in NHS budget between 2016/17 and 2019/20.
- If the UK is unable to join the EEA and instead joins the WTO this could be a £4.6bn reduction
In our new briefing we consider we explore what the UK leaving the EU might mean for funding of the NHS in England. Our modelling builds on work by IFS and NIESR.
It finds that due to slower economic growth if the UK left the EU even if the aim for a surplus in 2019/20 is discarded – and instead the aim is for a balanced budget – further consolidation of £16bn would be required (assuming the UK joins the EEA – the most optimistic scenario). It is hard to say what this means for the NHS, as the government has the option of raising taxes, further cuts to other public services, or extending its current policy of austerity. But if the NHS takes an equal share of this, its budget would reduce by about £2.8bn.
This would be an average decrease of 0.4% a year in real terms between 2016/17 and 2019/20. This would be considerably less than the (already demanding) £121.7bn budget. Under NIESR’s more pessimistic WTO scenario, and with the same assumptions, this would be £4.6bn lower rather than £2.8bn.
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