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Sunday 23 October 2016
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Brexit could cost the NHS billions, says healthcare report

A leading healthcare charity has warned that NHS budgets could see a cut of £2.8 billion if the UK leaves the EU
Anita Charlesworth

A leading healthcare charity has warned that NHS budgets could see a cut of £2.8 billion if the UK leaves the EU.

The Health Foundation has released a report detailing the financial implications on the NHS of leaving the EU, assuming the government aims to eliminate the national deficit through taxation and public spending cuts by 2019/20.

The report, NHS finances outside the EU, relies on economic modelling from the National Institute of Economic and Social Research (NIESR), which forecasted that after a decision to leave the EU, economic growth would fall from 2% to 1.5% per year through to 2019/20.

Anita Charlesworth (pictured), director of research and economics at the Health Foundation, said: “There is an umbilical cord between the performance of the economy and the finances for the NHS.

“It is incredibly difficult to see how the fortunes of the NHS cannot be affected by any downturn in our overall economic performance.”

While a 0.5% drop does not signal a recession, following NIESR predictions, such a reduction would amount to an economy that is £43bn smaller than it was expected to be in 2019-20 after the March budget.

Although Chancellor George Osborne has now scrapped plans for a surplus of 0.5% GDP by 2019/20, the charity warns that balancing the budget without ring-fencing healthcare would mean a £2.8bn cut.

Charlesworth said that this would take the NHS back to the same level of spending in 2015-16.

She said it is “difficult to see how that would be delivered” as it would come on top of a “very fragile NHS”.

She said: “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.”

In the longer term, the Health Foundation projects that the NHS will face a funding shortfall of at least £16 billion by 2030/31, even before considering the impact of leaving the EU.

Furthermore, if the UK leaves the EU but joins the European Economic Area (EEA), the NHS funding shortfall could be at least £19 billion by 2030/31.

If the UK fails to join the EEA, that deficit could hit £28 billion, which amounts to £540m per week.

The report also found that if economic growth slows as predicted, funds no longer being paid to the EU would be cancelled out by the negative economic consequences of leaving.

Therefore, if the NHS were to receive the extra £100m a week promised by Vote Leave from 2019/20, this would require: increased taxation of around 1p on the rate of income tax; adding £5.2 billion to the expected public finance deficit; or making further cuts to other areas of public spending.

Professor Jane Dacre, president of the Royal College of Physicians said: “The reason this doesn’t sound good is because there has been an enormous amount of change in the health service already.

She added that her overriding concern is that the NHS “is under-doctored, under-funded and overstretched”.

“What we really need to do is to increase the effort that we make to value the workforce,” she said, estimating that 10% of doctors in the NHS come from the EU.

Dacre added that there has been “chatter” around EU doctors who are uncomfortable about working here and not applying for posts in the UK – on top of the already high numbers of trainee doctors moving abroad for work.

Saffron Cordery, director of policy and strategy at NHS Providers, also said that there have been emails from their member organisations “asking if any other trusts had been in the situation of having people that they specifically recruited now deciding not to come”.

While she said they do not have any hard figures on it, “we know that anecdotally there is certainly a sense of bubbling under” of people saying they don’t want to come here to work.

Furthermore, she said the sudden reluctance to work in the UK is hitting NHS trusts and independent providers alike.

Stephen Dalton, chief executive of NHS Confederation, said EU healthcare workers “won’t wait to find out” how leaving the EU will affect their future.

“We need to move on from just telling people that they’re valued to giving them some security at the end of that two year period,” he said, “that actually they will have some legal safety to remain in this country.”

He said: “What we can see is that a lot of people that are already here, never mind people coming here, will actually leave.”