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A Recommendation Report for Nhs Funding Shortage

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• Module Code:PM502

• Class/Group: Group 10

• Module Title: Skill for study (2)

• Assessment Title: Finally report

• Assignment Title: NHS

• Tutor Name: Kirsten Somerville

• Student GU ID

• Date of Submission: Sunday 24th March, 2019

• Word count :1594

A recommendation report for NHS funding shortage

Executive summary

The National Health Service (NHS) currently are facing unprecedented financial pressure. Facing a serious financial deficit, the government announced that they will increase 3.4% funding every year in the next 5 years. However, although the government increases the budget ratio, it does not meet the demand of patients because of the troubles such as population growth, ageing, morbidity changes etc. The report evaluates that funding source from government increase spending on social care, but it is not available and sufficient at the moment, it is recommended that NHS has to increase additional funding through recovery debts owned as much as possible, and reduce the possible spending of NHS daily expense to alleviate financial strains of NHS.


1.Introduction 4

2.Background 4

3.Solutions 5

a)Government increase spending on social care. 5

b)Increase additional funding for the NHS. 6

c)Reduce the possible spending of NHS daily expenses. 7

4.Conclusions 7

5.Recommendations 8

6.Reference: 9


The National Health Service (NHS) is a health care institution in UK, providing free medical services to residents living in the UK. Recently, there is a big problem on NHS funding. Funding for health services can seem overwhelming. The scale is enormous– the NHS spent almost £124 billion in 2017/18 in England which accounts 15% of the total public spending (The health foundation, 2017). As the increase of the ageing population, the growing number of patients, and plus the cuts to local authority funding, is placing enormous pressure on social health services (Select Committee on the Long-term Sustainability of the NHS, 2017). The shortage of social care services has brought unprecedented pressure to the NHS that is increasingly difficult to control (ibid). The patient's medical cycle is prolonged, and many patients cannot receive timely treatment, the funding problem of NHS is eager to solve. According to Nuffieldtrust (2017), it points out that NHS trusts have carried out on 2017/18 in order to reduce fiscal deficit. The current basic overrun or loss is 5.9 billion pounds. In order to achieve their £500 million deficit target, they will need to cut £3.6 billion in operating costs and receive £1.8 billion in temporary additional funding (Nuffieldtrust ,2017). This report aim to evaluate several solutions to solve the problem of NHS funding shortage.


The NHS was born out of providing better medical services for everyone, regardless of wealth status (NHS England, 2016/2019). In addition to prescription drugs, optical services, and dental services, NHS still provides free medical care to UK residents (ibid). According to the statistics, the current population of the UK is over 64.6 million, and the population of England alone is 54.3 million (ibid). The NHS, which is the main source of funds through taxation, has recently been under tremendous pressure. The NHS in the UK needs to treat more than 1 million patients every 36 hours (NHS England, 2016/2019). If a series of requirements are to be met, the NHS will incur additional costs, including population growth, ageing, morbidity changes, and cost pressures associated with new technologies or compensation (Stoye, 2018), and insufficient funding has become a serious problem for the NHS. Until 2015/16, NHS Providers has showed, the financial deficit has escalated to approximately £4 billion (David, 2018). In addition, compared with the history of NHS, public consumption has experienced a substantial increase in health, from 3.5% in 1949-50 to 7.3% in 2016-17 (ibid). According to the figure 1 below, the NHS budget is increasing year by year over 10 years from 111.2 billion ponds in 2010 to 128 billion ponds in 2020. Since 2009-10, the NHS funds have been sufficient to deal with population pressure. However, this is only one third of the pressure (Stoye, 2018). According to the NHS provider, the deficit in the emergency hospital sector is about 4 billion pounds (David, 2018). The gap between resource and patient demand is nearly £30 billion until 2020/21 (ibid). However, divert funds from other aspects of public expenditure can only be a short-term policy and is not enough to sustain long-term funding problems, in particular, the increase in medical expenditures will be particularly difficult by reducing the share of payments for other services(ibid).

Figure 1: Annual NHS total expenditure and budget

Source: Department of Health annual report and accounts 2016/17; Autumn Budget 2017; Office for Budget Responsibility November 2017 Economic and fiscal outlook: Economy supplementary tables.


a)Government increase spending on social care.

According to the announcement of the prime minister on 5 July 2018, there is an average annual increase of 3.4% funding will provided to the NHS in the next five years (Gareth, 2018). However, the increases are lower than the funds required (4%) by the Kings Fund and other organizations to balance the NHS expenditures (Ham, 2018). People in the NHS are expected to obtain more funds for the scale of the operational and financial problem they are suffering (ibid). As taxation is the main source of NHS funds, one of the government’s practices is to divert money from other public areas expenditures to the NHS (Stoye, 2018). Figure 2 shows how government spending and public health spending have changed since 1979-1980, with the share of national income (ibid). Through cutting spending from other



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