New analysis from the Health Foundation shows economic fallout from leaving the EU poses serious risks to NHS finances

5 July 2016

The Health Foundation, an independent health care charity, has today released new analysis showing the economic fallout from leaving the EU poses serious risks to NHS finances.

The NHS in England is already facing its worst ever financial challenge, following an unprecedented squeeze in funding for health and social care. At the end of the last financial year, health care providers reported a £2.5bn deficit, as 65% struggled to balance their books.

Factors including an ageing population and an increase in prevalence of chronic conditions mean funding pressures are set to rise by around 4% a year over the next decade. The Health Foundation projects that the NHS will face a funding shortfall of at least £16bn by 2030/31, even before considering the impact of leaving the EU.

Leading economists are almost unanimous in concluding that leaving the EU will have a negative effect on the UK economy, which in turn will impact on public spending. The Health Foundation report, NHS finances outside the EU, concludes that it is difficult to see how the NHS can escape the consequences.

According to the authors, the NHS budget could be £2.8bn lower than currently planned in 2019/20, if the government aims to balance the books overall.

In the longer term, the analysis concludes that the NHS funding shortfall could be at least £19bn by 2030/31– equivalent to £365m a week – assuming the UK is able to join the European Economic Area. If this is not the case, the shortfall will potentially be as high as £28bn – which is £540m a week.

There has been much discussion of additional funding for the NHS as a result of the UK leaving the EU. The Health Foundation’s analysis finds that if economic growth slows as predicted, funding no longer being paid to the EU would be more than cancelled out by the negative economic consequences of leaving. Therefore if the NHS were to receive an extra £100m a week from 2019/20, this would require: increased taxation of around 1p on the rate of income tax; adding £5.2bn to the expected public finance deficit; or making further cuts to other areas of public spending.

Anita Charlesworth, Director of Research and Economics, the Health Foundation, said: 'It is widely anticipated that leaving the EU will lead to lower economic growth, and when the economy sneezes, the NHS catches a cold. The NHS is already half way through its most austere decade ever, with finances in a truly dire state – it cannot afford to face another hit. Eighteen months after the NHS five year forward view there has never been a more urgent need for a clear plan to deliver the savings it set out and ensure the service has the staff it needs to sustain high quality care.'

Stephen Dalton, Chief Executive, NHS Confederation, said: 'The NHS is already facing multiple pressures from rising demand and cuts to social care. The current fiscal and political uncertainties are likely to stall plans for transforming how we plan and organise the delivery of NHS care.

'We have not yet seen any evidence which suggests the NHS will be better off as a result of leaving the EU and we urgently need political leaders to move on from ill-informed rhetoric about the NHS.

'If health and social care is to remain sustainable we need to have an honest conversation with the public about how it is funded.'

Saffron Cordery, Director of Policy and Strategy, NHS Providers, said: 'The NHS has to stop being in denial about the consequences of the Spending Review and the likely knock-on effect of Brexit. 

'It is time for honesty and realism that there is now a gap between what the NHS is being asked to deliver and the funding available. We urgently need a plan to close the gap.'

Professor Jane Dacre, President, Royal College of Physicians said: 'We depend on dedicated healthcare professionals from Europe and around the world to deliver high quality safe care. They are feeling anxious and confused about how welcome they are and will be in the future. We need to urgently reassure our staff about how valued they are and ensure they have the resources they need to do their jobs. If we don't value our staff and don't resource our NHS in order to deliver high quality care – then patients will suffer.

'The figures coming from this report are concerning. The NHS is currently under-doctored, underfunded and overstretched. We can't even fill our rotas with enough doctors on the wards today. We have found that 40% of advertised consultant posts remain unfilled. We fear the double whammy of reduced funds for the NHS when we need more, and not being able to staff our wards will have significant implications for meeting the needs of patients. 

'We are entering uncertain times and we need strong leadership to address these issues.'

ENDS

 

Media contact

Jenny Rushforth

Jenny.rushforth@health.org.uk

020 7257 8047

0781 802 5507

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