New analysis reveals daunting scale of financial challenge facing health and care post-COVID Health Foundation challenges government to build back healthier

24 November 2020

New analysis from the Health Foundation has revealed the scale of funding increases needed to meet the demands of COVID-19, make the improvements to services laid out in the NHS Long Term Plan, fix social care and secure the nation’s health for the long term.

In a new report published today (24 November), the charity warns that the government risks losing sight of the action needed now to shore up the future of health and care post-COVID. The analysis shows that this year and next, COVID-19 alone is likely to result in extra health service costs of around £40bn a year. Most of these costs are temporary and directly related to managing COVID-19 (£27bn for PPE and test and trace), but not all. While huge uncertainty remains, the analysis indicates that beyond next year, the health service could still require ongoing funding increases of around £10bn per year by 2023/24. This includes the costs of addressing the backlog of care while accounting for lost productivity, meeting rising demand for mental health care and delivering the service improvements set out in the NHS Long Term Plan.

The Foundation emphasises that to deliver the Long Term Plan and put NHS services on a sustainable footing after the pandemic, there needs to be continued investment in public health of £3bn extra a year, workforce training needs to increase by £1bn, and capital by around £1bn.

Alongside funding for the NHS, the charity estimates that required improvements to adult social care will need an extra £6.1bn in 2021/22 on top of any specific COVID-19 costs, rising to £11bn per year by 2023/24. This would allow for improvements in the current threadbare safety net for social care – including by boosting staff pay and increasing the availability of care – and to more fundamentally reform the system to make it fairer and more generous for vulnerable people.

The Health Foundation also urges the government to take action to avoid the nation’s health deteriorating in the wake of the pandemic. Many additional health needs will come from the economic consequences of the pandemic with higher unemployment, increased poverty and other impacts from social restrictions likely to mean higher rates of poor mental and physical health. Sustained investment will be needed in the areas that contribute to health, from transport to housing and the creation of higher quality jobs.

The short-term costs of the pandemic have pushed up public borrowing on a huge scale, taking the UK’s debt to GDP ratio above 100%. However, the Foundation has cautioned the government against reducing the debt by cutting non-NHS services in the future and underfunding the NHS and social care. In the medium term this can only be achieved through a higher tax to GDP ratio. The timing of tax decisions will depend on the recovery of the economy, but public spending cuts present a real risk to the health of the nation.

Set against this analysis, the charity says the trailed spending review allocation of an extra £3bn for the NHS will go some way to helping tackle the treatment backlog and support mental health services, but is only a start to the path to recovery for the health service.

Health Foundation Chief Executive, Dr Jennifer Dixon, said:

'Our new analysis reveals the scale of funding needed if the government is going truly to return the nation to health post-COVID. The cost of these big investments is daunting but the cost of not investing is likely to be even greater – the backlog in care could be dwarfed by a bigger ‘frontlog’. The government should take the opportunity to come good on its election pledges on the NHS, social care, ‘levelling up’ the country, and making better health a genuine goal of public spending.

'The cumulative impact of years of underfunding combined with a once-in-a-century global pandemic means the government needs to take bold action now and in the medium term. This investment in the future will signal that work has begun on the government’s ambition to build back better, and healthier too.'

Danny Mortimer, Chief Executive of the NHS Confederation, said:

'With our country facing intense economic turbulence, the additional £3 billion expected for the NHS next year is an essential investment but as this analysis shows, it is not enough to properly address the backlog resulting from the pandemic and to help meet the increased demand for mental health services.

'Health leaders are telling us their staff are caring for patients with what feels like one arm tied behind their backs due the pressures from coronavirus and they are doing so with equipment, IT and buildings in desperate need of investment, as well as additional funding being long overdue across staff training and education, social care and public health. The government has major challenges ahead but now is not the time to close the chequebook as this will only create significantly worse problems down the line.'

Notes

Anita Charlesworth, the Health Foundation’s Director of Research and REAL Centre, will be setting out the key findings from the new analysis at the NHS Confederation’s NHS Rest Conference on Tuesday 24 November. Find out more.

Media contact

John Munro
john.munro@health.org.uk
020 7257 2082

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