Experts have just blown apart Theresa May’s claim she is giving the NHS all the money it needs

Prime Minister Theresa May is fond of claiming that her government is pumping £10bn into hospitals over the next five years.

Only last week she responded to a question from Jeremy Corbyn with this:

I would remind the Right Hon Gentleman that it is this Government that is providing not just the £8 billion of extra funding that the NHS requested, but £10 billion of extra funding.

Yet two leading mainstream economists from the Institute for Fiscal Studies (IFS) have questioned this sum. And they’ve now revealed that funding for the health service has never been so low.

Spending growth

IFS director Paul Johnson appeared before the Treasury select committee on 29 November. His career has included roles at the Treasury and banking watchdog the Financial Services Authority. He told the select committee that projected NHS spending growth was well below the norm for the health service:

Spending on health over the next three years is due to rise by a very small amount: 1% or 2% over that period relative to an average of 3% or 4% a year over the period of the NHS’s existence. So that’s a period of much smaller than average increases in health spending when the population is both growing and ageing. The pressures look reasonably significant.

Cuts to social care, he added, are likely to pile even more pressure on hospitals:

Read on...

My sense from talking to people in the health service is that it is tough but the thing they are really struggling with is that spending on social care has been cut significantly because of the squeeze on spending in local government. And that is putting additional pressure on the NHS.

There was no mention of the NHS or social care in Chancellor Philip Hammond’s 72-page Autumn Statement.

Labour MP Rachel Reeves, who sits on the committee, asked if the IFS agreed with the Health Select Committee that the £10bn supposedly given to the NHS was in real terms more like £6bn.

Carl Emerson, deputy director of the IFS and also at the committee, told her:

It sounds quite plausible and it may even be smaller than that.

Economic prospects

Johnson painted a bleak picture of the country’s economic prospects under the Conservatives. He said the country is heading for a decade of stagnating earnings:

Average real wages today are below where they were in 2008 and the projections are they won’t have recovered their 2008 level by 2020. They might scrape ahead or they might be somewhat below – but we will have nearly a decade without essentially any real earnings growth.

In every decade since the 1920s, there has been growth in real earnings of between 1% and 2% a year.

“Having a decade where you have no real earning growth is pretty unprecedented – certainly in anybody’s lifetime,” he said.

Many young people face a future of falling incomes, renting, and small or no pensions:

Incomes for people in their 20s are now below what they were in 2006 and 2007. Rates of owner occupation are half what they were 20 years ago and still below where they were 30 or more years ago for that age group. And possibly more worrying still for the long run, there is essentially zero coverage of defined-benefit occupation pension schemes in the private sector for people in their 20s and 30s relative to 40-something per cent 30 or 40 years ago.


IFS analysis shows the Autumn Statement does “almost nothing” to alter the unequal impact of George Osborne’s £12bn welfare cuts, which included freezing most working-age benefits. This means the poorest households are still set to lose £1,700 a year between 2015 to 2020.

Johnson said:

Lower income working age households lose when you chop £12bn off the welfare budget.

May’s pledge to build a country that “works for everybody” outside Number 10 is already starting to ring hollow.

Get Involved!

Take action against the sell off of our health service with Keep Our NHS Public.

Write to your MP.

– Read more Canary articles about the NHS here.

Support The Canary, so we can continue to bring you the news that matters.

Featured image via Flickr

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us

Comments are closed