High Peak Liberal Democrats
On Monday I launched Health and Social Care: Delivering a Secure Funding Future, which offers some compelling answers on how to reform NHS funding. This report was initiated by my colleague, Norman Lamb, who is rightly recognised as one of the most important figures in modern British health policy.
Compiled for the Liberal Democrats by 10 health & social care specialists, including former chief executives of NHS England, the Royal College of Nursing and the Patients Association, the timing could not be more significant given the Conservatives postponed more than 50,000 operations just last month.
Drawing on their recommendations I believe the following plan of action is required.
An immediate increase in NHS and social care funding for 2018/19. The funding would not rely on deficit financing or other magical sources, but would be achieved by putting a penny on the pound on income tax, bringing in an estimated £6bn in annual revenue. £4bn would go to the NHS - this sum is in line with the recommendations of NHS England chief executive Simon Stevens. The remainder would be ring-fenced for social care via local authorities.
It is impossible to remove politics from the NHS entirely but an independent approach to budget setting would deliver significant benefits. This could be achieved through the establishment of a new body, roughly equivalent to the Office of Budget Responsibility, which would recommend funding requirements over a five-year cycle.
Health and social care funding must be combined.
The combined budget would be financed by an earmarked health tax. This could be based on a reformed version of national insurance, with the Treasury offsetting annual fluctuations within a five-year cycle. Earmarking of taxes has some well-rehearsed disadvantages. But even those previously strongly opposed, like Lord Macpherson, the former permanent secretary to the Treasury, now accept that in the case of the NHS some form of dedicated tax is necessary.
National Insurance would be reformed. I would consider ending the exemption for higher earning working pensioners.
The long-term costs of adult social care must be shared equally between the elderly, their families and the state. The Dilnot report, agreed in principle in Coalition, provides a framework together with a cap on costs.
A more secure funding arrangement for the NHS and social care is only sustainable if there are efforts to move more treatment from hospitals to the community, including pharmacies and GPs. This requires a wholesale rethink of the tariff system, which incentivises hospital treatment.
There has to be renewed emphasis on preventative health measures and social mentoring. The Lib Dems would continue to prioritise mental health.
Technology, if properly applied, would ease many of the problems on health care. Medtech has great potential. I have asked for expert advice on the potentially transformative technologies and how they should best be introduced.
I urge Lib Dem members to read the report; it forms the basis of what would be an effective, radical, and urgently needed reform of NHS funding.
* Vince Cable is Leader of the Liberal Democrats
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