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English NHS budget squeeze could run for at least a decade

The period of relative austerity facing the NHS could run to a decade according to a new IFS report, funded by the Nuffield Trust, that maps the longer term financial challenge facing the health service.

The likely squeeze on NHS spending would, however, follow a decade of large real increases under the last Labour Government and a particularly large (but largely unintended) increase in NHS spending as a share of national income during the late 2000s recession.

This means that even the planned freeze in English NHS spending up to 2014–15 would, if delivered, still leave spending as a share of national income well above its 2007−08 (pre-financial crisis) level.

Indeed, the projected hit to national income from the financial crisis is such that even a continued real freeze would not see English NHS spending fall to represent the same share of national income as it did in 2007−08 until 2017–18.

The report also assesses future prospects for social care funding. Demographic pressures are increasing demand for social care, while the recent (Dilnot) Commission on Funding of Care and Support proposed a reform of the system for funding social care in England that would increase the cost to the taxpayer.

NHS and social care funding: the outlook to 2021/22

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