UK Politics

Lib Dems pledge to plug NHS funding gap

Hospital ward Image copyright Science Photo Library

The Liberal Democrats have set out plans to plug the NHS funding gap in England by ploughing the proceeds of economic growth into public services.

Nick Clegg said only his party could meet "in full" the £8bn extra the NHS chief says is needed by 2020.

Mr Clegg said neither the Tories or Labour had a credible plan to safeguard the future of England's health service.

Chancellor George Osborne has pledged an extra £2bn for the NHS in 2015-16. Labour has promised £2.5bn above that.

The Lib Dems' pledge is in response to a five-year plan - called the NHS Forward View - which highlighted that an annual £30bn shortfall in NHS funding would open up in the next Parliament.

NHS England chief executive Simon Stevens, who drew up the proposals, said services were under pressure and "genuine new investment" was needed.

It said a programme of changes - including GPs offering hospital facilities - would help to plug a large part of the funding gap, but warned the NHS would still need above-inflation rises of 1.5% over the coming years.

That works out at an extra £8bn a year above inflation by 2020.

'Big difference'

In a visit to Kingston Hospital, Deputy Prime Minister Mr Clegg said: "We are setting out today a plan about how we can meet that funding gap that has been independently identified as necessary to make sure that our NHS is protected, cherished and supported now and long into the future."

The plan is based on the economy recovering in line with current projections made by the independent Office for Budget Responsibility, and would go alongside continued efficiencies and reforms in the NHS.

The additional funding will focus on two key priorities for the Liberal Democrats - mental health, and prevention.

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Media captionNick Clegg: "We will provide money for public services which grows in line with the growth of the economy"

Under the proposals, the extra £2bn for the NHS in 2015-16 announced by Mr Osborne in his Autumn Statement would be repeated every year in the next Parliament.

An additional £1bn a year from 2016-17 would come from a cap on the pensions tax relief for the very wealthiest, a dividend tax squeeze on those earning more than £150,000 and by axing the Conservatives' "shares for rights" scheme.

The bulk of extra funding would come from the Lib Dems' pledge to increase public spending in line with economic growth, after eliminating the structural deficit in 2017-18.

In a press conference on Monday, Mr Clegg told reporters: "The big, big difference between ourselves and Labour and the Conservatives is that we have said that once we have dealt with the structural deficit, once we have dealt with it in 2017-18, we will link the amount of money going into public services - including the NHS - to the growth of the economy.


NHS England budget for 2014-15


Shortfall predicted by 2020

  • That could fund 100 hospitals

  • New ways of working could save £22bn

  • But NHS still needs an extra £8bn


By contrast, he said, the Conservatives "want to see the proportion of money going into public services, public spending, remorselessly decline as a proportion of our national wealth, for ideological reasons".

The Lib Dem leader added: "Labour, of course, will be still paying off much, much more interest on our cumulative debt because they haven't committed to the timetable by which we would deal with the deficit, money which instead could be spent on hospitals.

"So we're the only party, by managing things responsibly, and in a balanced way, that can meet the Simon Stevens challenge and meet it in full."

The Lib Dems would also commission a cross-party review of NHS funding in 2015 before the next Spending Review, if it formed part of the government after the general election in May.

'Huge pressure'

The Conservatives have committed to increasing NHS funding in real terms in each year of the next Parliament.

Health Secretary Jeremy Hunt told the BBC that the NHS was under a "huge amount of pressure" but the government had responded to the concerns of NHS managers and "prioritised" the health service in terms of extra funding next year.

"In the Autumn Statement, the government had a choice," he told BBC Radio 4's Today programme.

"On the back of an economy that is recovered, on the back of a country that is on the right track, we had extra resources available and when the chancellor and the prime minister had that choice, they chose to prioritise the NHS.

"You can only do that if you have the strong economy to give the NHS those resources."

Labour says it would spend an additional £2.5bn on top of Mr Osborne's plans, which would be paid for by a new "mansion" tax, clamping down on tax avoidance by big corporations and a new tax on tobacco companies.

Reacting to the Lib Dem announcement, shadow health secretary Andy Burnham accused Mr Clegg of "re-announcing money from within the NHS", and said Labour had a fully-funded plan to recruit 20,000 more nurses and 8,000 GPs.

"After backing David Cameron's NHS reorganisation and privatisation plans to the hilt, the public will not believe a word of this unfunded policy," he added.

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