We need to talk about the health of our nation

Last October, Audit Scotland released a report on the funding of NHS Scotland which rightly received significant press coverage.

The headline findings of SNP cuts to the health budget were, understandably, seized upon by opposition parties, highlighting the contradiction between these and the SNP’s rhetoric of “protecting NHS budgets”.

Just as understandably, the SNP sought to manage the story with some good old-fashioned spin.  In this case, it fell to Health Secretary Shona Robison:

The Audit Scotland report outlines that the NHS revenue budget – frontline spending – has increased in line with this Government’s commitment. The capital budget meanwhile fluctuates from year to year depending on on-going capital infrastructure projects. The reduction in 2015/16 is largely due to the completion of the new Queen Elizabeth University Hospital in Glasgow, which was funded from the capital budget.

There is nothing factually inaccurate in any of these arguments.  The SNP is cutting the overall health budget by 0.9% in real terms between 2013/14 and 2015/16 and this is primarily caused by a 53.6% cut to the capital budget whilst the revenue budget is increasing marginally over the same period. These facts are clear from the Audit Scotland report.

They don’t, however, tell the whole story. Revenue expenditure, the money that is spent on every day front-line services, might be seeing a real-terms increase but this is less than the corresponding growth in spending south of the border.  NHS England’s budget, which dictates the Barnett consequentials added to the Scottish Government’s block grant, has increased and continues to increase by a greater proportion than Scottish NHS spending – and this is not an isolated finding.  Even before the general election the IFS reported that NHS funding in Scotland had fallen 1.2% since 2009 whilst England’s had increased by 4.4%; all this while the overall budget in England has been cut by 55% more than Scotland’s.

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Fig 1 via IFS

The Scottish Government’s half-truth that this reduction is merely caused by completion of the Queen Elizabeth “super hospital” in Glasgow doesn’t stack up either.  Why does the completion of one large project prevent the now freed-up cash from being spent on a new one?  Instead of re-allocating that money into improving infrastructure, the SNP government simply decided to use it elsewhere.

Capital investment is important, something the Scottish Government are keen to laud when they’re spending the money; patting themselves on the back for infrastructure which will provide “increased efficiency, shorter waiting times and better continuity of care”.  Why are these goals suddenly unimportant when they cut the capital spend?  How did the completion of one hospital in Glasgow suddenly become an accepted excuse for a capital spending cut of over 50%?

And whilst it’s true to say that Scottish NHS revenue budgets have increased they will do so by 1.9% in the same two-year period that comparable spending in England increases by 5.8%.

So, whilst the Scottish Government is technically correct that they have increased revenue budgets in real terms, it has done so at a level which lags pitifully behind the increases from the coalition and Tory governments in England.

Blame game

The usual response to this is that the Scottish Government’s budget is being cut and financial constraints are being forced upon Scotland.  John Swinney, the Scottish Government Finance Minister, even does so in the budget press release, bemoaning “the Scottish budget is set against the context of cuts by Westminster to the Scottish Government’s Fiscal DEL (departmental expenditure limits) budget of around 10 per cent in real terms over five years”.

The SNP always use 2010 as the benchmark because it was the high-point of Labour’s pre-election spending and saw record DEL delivered to Holyrood, meaning stats using “cumulative cuts since 2010” are conveniently eye-watering for a party which wants to make you believe Scotland is being short-changed by Westminster.

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Surely, though, it would be more appropriate to compare health budgets since 2013/14 with the overall budget since 2013/14, not 2010?  And when we do that, we see that the Scottish Government’s DEL is actually increasing, in real terms, by 0.7% for 2015/16. (See here).

So, not a 10% cut and it’s worth noting that the Scottish Government aren’t projecting a 10% “cumulative cut since 2010” to become reality until at least 2016/17; whilst a comparison with the DEL in 2007, when the SNP came to power, would reveal a cumulative real-terms cut by 2013/14 of just 2.2%, slightly more than the 2.1% drop in Scottish GDP but well below the 10% real terms drop in Scottish tax revenue in the same period.  All before the oil crash.

Regardless, it can simply no longer be denied that the Government has chosen to cut health spending; nor can it be denied that whilst the revenue budget has increased marginally in real terms, it has not done so at the same rate as NHS England.

That, however, is entirely the Scottish Government’s prerogative. It is its choice and its choice alone to assign its budget in this way.  There may be very good reasons to re-direct that money elsewhere.  Perhaps voters would prefer a government that has spent their taxes on subsidising the council tax freeze or providing free university tuition to students from high-earning families; but it should be acknowledged that it is the Scottish Government’s conscious decision to do so and a choice which leaves our health service under significant financial pressure.

Pressure which will continue to increase as we face the inevitable impact of an aging population, living for longer with more complex and more expensive chronic conditions.

We should be discussing these issues and contributory factors such as lifestyle and dwindling sporting participation in all age groups.  We should be discussing mental health and palliative care.  We should be discussing the exponential growth in the cost of medication.  We should be debating what we want from the NHS and whether it can, or even should, continue to be the comprehensive service it has become; and, if so, what it will take to fund this.  We should be honestly discussing the tax implications of that choice and whether we are willing to pay more to ensure the health service’s survival, something which finally seems to be coming to light with the recent debate on SRIT.

In other words, we need exactly the sort of debate that Norman Lamb is leading calls for in England:  a non-partisan cross-party commission into health and social care in England – “a Beveridge Report for the 21st Century”.

I’d like to see opposition parties in Scotland calling for the same here.  I’d like to see them raise this in Holyrood, reference the SNP’s spending record and prove the Scottish Government has not matched spending increases in England; but use it not as a stick to beat them with but constructively to pressurise the government to convene a similar commission.

Photo: Nicola Sturgeon announces £4m investment in precision medicine at QEH Glasgow CC BY-NC 2.0

Comments

  1. Keith Howell says

    Thanks Fraser, for this excellent well argued piece that reveals the reality behind statistics so often used in a very selective way to make party political points. Fraser makes the critical point that politicians need to get beyond point scoring on the NHS if we are to have any hope of an honest debate about what is arguably our most important public service. No matter who is in power, the NHS faces huge challenges that will only get heightened by the underlying pressures of demographic trends, and the progress of medical science that creates cost pressures as much as it delivers new treatments.

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