Brexit and NHS Funding
The outcome of the EU referendum has thrown the UK’s public finances into chaos and funding for the NHS is at risk. According to the HSJ, experts are unwilling to offer firm predictions about the future of NHS funding, but what the HSJ did discover was that none of the independent experts and senior health service figures interviewed expected increased funding to be one of the more likely outcomes for the NHS.
Very quickly after the result was announced the Leave campaign backtracked on its promise to spend the £350 million per week that it said went to the EU on the NHS instead. Members of the Leave campaign said the campaign promise was “a mistake” or as Chris Grayling put it “an aspiration”; Iain Duncan Smith just said he’d never made that claim. The promise appeared on vote leave posters and the organisation’s bus.
The biggest risk for the NHS is that a recession has been triggered; NHS funding is dependent on money from tax receipts, but these will fall significantly in a recession leading to less money for public finances. The NHS is struggling to work with the current level of funding, so as Nuffield Trust chief executive Nigel Edwards said to the HSJ “the shock on the NHS is likely to be very, very significant” and “even if some of the subscriptions to the EU can be re-routed to the NHS, they’re unlikely to arrive in time.”
Leading midwives have expressed fears over the impact of Brexit on NHS funding. In a statement, the Royal College of Midwives (RCM) said: "The vote is likely to result in a period of considerable uncertainty for the UK. Whilst it will be some time before the full economic, political and social implications become clear, the impact that this will have on public finances and the funding of the NHS remains of concern to the RCM."
In the short-term, a major intervention in the NHS’s finances planned for mid-July is expected to go ahead. This is expected to involve senior government figures noting the importance of NHS organisations improving their financial situation, but it also might involve new cost-cutting measures. It is, however, unlikely to be led by David Cameron following his resignation.
In early July The Health Foundation published an assessment of the impact of Brexit on the NHS's budget. The Health Foundation used predictions produced by the National Institute of Economic and Social Research (NIESR) on the effect of Brexit on the UK economy to determine its effect on the NHS's budget. According to The Health Foundation, even with the most optimistic scenario, in which the UK chooses to join the EEA (European Economic Area), there would be a drop of £2.8 billion in the DoH budget in 2019/20, but under the NIESR’s most pessimistic scenario, in which the UK relies on WTO rules, the DoH budget would be £4.6bn lower in 2019/20. The Health Foundation based its scenarios on the government seeking a balanced budget, however in July 2016 George Osborne announced that he was abandoning the plan to return the government finances to surplus by 2020, which could have implications for the NHS’s budget.
For full details of the current underfunding of the NHS see NHS Funding