The Pharmaceutical Journal
Vol 268 No 7195 p557-561
27 April 2002

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HM Treasury (www.hm-treasury.gov.uk)

Prime Minister defends costs of NHS cash boost

The Prime Minister (Tony Blair) was forced on the defensive over the future of the National Health Service, despite a massive cash injection in last week's Budget (our Lobby correspondent writes).

Nurses and other health care professionals have protested that the Chancellor of the Exchequer's 1 per cent rise in National Insurance Contributions will cost health service and local government staff £600m. Tony Blair admitted that his Ministers had to make "hard choices", but added: "The increasing demands on the NHS have to be tackled and it cannot come for free. We have to decide as a country which is the best and fairest way to do it."

The Budget included a 43 per cent rise in NHS spending over the next five years, equivalent to £40bn (PJ, 20 April, p522). A new independent NHS auditor will for the first time report annually to Parliament and local reports will show how health money has been spent. There will be new incentives for hospitals to improve performance. The Secretary of State for Health (Alan Milburn) later outlined plans to employ 15,000 more doctors and 38,000 more nurses and build 42 new hospitals by 2008. He also plans to introduce a scheme to fund hospitals according to their results.

Derek Wanless, author of a Treasury-commissioned report into the future financing of the NHS, warned that spending forecasts are clouded by uncertainty. His report, published on 17 April, says that health costs could soar to between £154bn and £184bn by 2023, compared with the current £68bn. The Institute of Fiscal Studies has predicted that the expansion of NHS funding could force the Chancellor to introduce more tax rises on top of his Budget measures or boost borrowing by £7bn.

News feature, p564