Waiting room

£36bn to reform NHS and Social Care over three years

Yesterday the Prime Minister set out plans to tackle the Covid backlogs and reform adult social care, with £36bn being raised in the health and care system over the next three years, to ensure it has the long term resource it needs.

From April 2022, the government will introduce a new, UK-wide 1.25 percentage point increase in National Insurance to help tackle the NHS backlog. This will then return to its current rate in April 2023, with a new health and social care tax being introduced at a rate of 1.25% instead. The rates of dividend tax will also increase by 1.25% to help fund this package.

The new plans aim to ensure everyone contributes fairly, with all working adults, including those over the state pension age, paying the levy.

Every individual will contribute based on their income, with those earning more paying more. Employers who benefit from a healthy workforce and a taxpayer funded health service, will be asked to contribute so the costs are more widely shared.

This will raise around £12bn extra funding per year, to be invested initially in the NHS backlog, before a proportion is moved to social care over the next three years.

Amanda Pritchard, NHS Chief Executive, said: “It’s absolutely right that NHS staff, who have worked tirelessly throughout the pandemic to care for hundreds of thousands of Covid patients in hospital, get strong backing to recover routine services and begin to tackle the Covid backlog.

“The pandemic is still with us, and we will have to live with the impact of Covid for some time, so the additional funding confirmed this week will help meet those additional costs and give the NHS clarity for the coming years while delivering millions more of the vital checks, tests and operations that patients need.”

The number of patients waiting for elective surgery and routine treatment in England is now at a record high, with 5.5 million on the waiting list. This could reach 13 million by the end of the year if left unchecked. Before the pandemic, nine out of ten were waiting fewer than 25 weeks in England, which has now risen to 44 weeks.

The new funding is expected to fund an extra 9 million checks, scans, and operations. This is in line with the NHS Long Term Plan aimed at increasing activity each year. In recognition of pressures from Covid, this is now expected to increase to 110% of the planned activity levels by 2023/24.

Speaking in the House, Prime Minister, Boris Johnson, said: “You can’t fix the Covid backlogs without giving the NHS the money it needs. You can’t fix the NHS without fixing social care, you can’t fix social care without removing the fear of losing everything to pay for it, and you can’t fix health and social care without long-term reform. The plan I am setting out today will fix all of these problems together.”

Chancellor of the Exchequer, Rishi Sunak, said: “We’re tackling the NHS backlog and taking decisive action to fix our broken social care system.

“This significant £12bn-a-year long-term increase in public spending will improve people’s lives across the UK - but our health and social care systems cannot be rebuilt without difficult decisions.

“The new Health and Social Care Levy is the necessary and responsible thing to do to protect the NHS, sharing the cost between businesses and individuals and ensuring those earning more pay more.”

Part of the new social care reform means that no one in England will pay more than £86,000 in care costs over the course of their lifetime. This will apply regardless of where they live, how old they are, what their condition is, or how much they earn.

Those without savings will also be supported by the government, with the state covering all care costs for anyone with assets under £20,000.

Anyone with assets between £20,000 and £100,000 will be expected to contribute to the cost of their care but will also receive state support, which will be means-tested.

The new £100,000 limit is more than 4 times higher than the current limit of £23,250, meaning many more people will be eligible for support than under the current system.

Health Secretary, Sajid Javid said: “Our nurses, doctors and care workers have worked tirelessly throughout the pandemic in our hour of need.

“But the pandemic has taken its toll - waiting times are longer than ever before and social care is under even greater pressure.

“This additional funding is a critical investment in our country’s future - it will give the NHS the extra capacity it needs to get back on its feet and is a vital first step in the reform of our broken care system.

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NHE May/June 2024

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