Changing population means NHS faces real-terms funding cut this decade

NHS spending in 2019/20 will be 1.3% lower in real terms than a decade earlier once growth and ageing of the population are taken into account, according to public policy analysts.

Research by the Institute for Fiscal Studies (IFS) reveals that real-terms DH spending will increase by 12% over the period from 2009/10 to 2019/20 under current government plans.

This equates to a 1.1% increase per year - outstripping the 0.8% per year rate of population growth over the same period, meaning that real-terms per capita spending will have risen 3.5% over the decade.

However, once changes to the 'age structure of the population' are taken into account, the IFS warns that current spending plans will in fact deliver a 1.3% drop in per capita spending.

NHS funding

The institute points out that the number of 85-year-olds in England is predicted to rise 16.1% over the decade to 2019/20, as part of an overall ageing population trend alongside rising overall population.

Significantly higher healthcare costs for older people - the IFS points out that public health spending in 2015 on the average 85-year-old was five times higher than for the average 30-year-old - mean that spending would have needed to increase 13.5% in real terms over the decade to keep pace with ageing and population growth.

IFS analysts also suggest that NHS costs could rise 1.6% a year between 2013/14 and 2020/21 because of rising prevalence of long-term conditions and improvements in medical technology.

Report author George Stoye, a senior research economist at IFS, said: 'Real UK health spending increased by 1.3% per year between 2009/10 and 2015/16.  This is the lowest rate of increase over any similar period since the mid 1950s, since when the long-run average annual growth rate has been 4.1%.

General election

'Current government plans are consistent with David Cameron’s pledge at the 2015 election to increase NHS spending by £8 billion. But they would leave health spending in 2019/20 below the amount needed simply to keep pace with the growth and ageing of the population seen since 2009/10, let alone the amount required to account for multiple other pressures on the health budget.

'Population ageing and increased demand for health will push up spending pressures by tens of billions of pounds over coming decades. We need credible strategies for dealing with this.'

GP leaders have warned that despite pledges of additional funding for general practice through the GP Forward View, the profession remains billions of pounds short of the funding it needs.

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