Starmer Rules Out More Money ‘Without Reform’ for Ailing NHS

(Bloomberg) -- Keir Starmer said more money will not fix England’s ailing National Health Service without fundamental reforms including wider use of technology, as he warned that his election promise to rebuild an organization ingrained in the country’s psyche could take a decade or more.

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“If we get this right people can look back and say this was the generation that took the NHS from the worst crisis in its history, got it back on its feet and made it fit for the future,” Starmer said in a speech about his plans for the NHS in central London on Thursday. “It’s reform or die.”

Starmer was speaking after a report commissioned by Health Secretary Wes Streeting set out a damning picture of the state of the NHS, with plays a pivotal role in millions of people’s lives on a daily basis.

Austerity after 2010, the pandemic and confusion caused by repeated top-down reorganization in 2012 have left the health service on its knees, Ara Darzi, a prominent surgeon and peer in the House of Lords wrote in the study. Capital investment fell short by £37 billion ($48.3 billion) during the 2010s compared to peer countries in Europe and beyond, he said.

But Starmer’s government is facing huge demands to repair public services across the board, while Chancellor of the Exchequer Rachel Reeves has warned that she has inherited a £22 billion black hole in the public finances ahead of her first budget statement on Oct. 30.

In his speech, Starmer said money cannot be the only answer, instead warning that the NHS will only get more funding if it accepts fundamental changes to the way it operates. The premier and Streeting see prevention and more local services as part of the solution, along with increased digitization.

Still, some of Streeting’s suggestions about how to get waiting lists down — including leveraging capacity in private hospitals — have exacerbated long-running fears about the creeping private takeover of NHS services.

Starmer, though, made clear that the government will not change the NHS as a service that is publicly funded and free at the point of delivery. Polls show Britons trust Labour more than the Tories to make fundamental changes to the NHS, which was founded by the party after World War II.

Whether the government can do so — and it’s likely to be measured at least in part on how fast it can help millions of people stuck on NHS waiting lists — will go a long way toward determining whether Labour gets a second term.

There are also huge economic implications. Rising health spending is the most important driver behind the projected near-triple increase in public debt over the next 50 years.

Public health spending as a share of GDP is set to reach 14.5% by 2073-74, up from 7.9% in 2023-24, according to the latest numbers from the Office for Budget Responsibility. Improving the health of the population could reduce the rise in debt pressures by over 40% of GDP by the mid-2070s, it said.

As in other developed economies, an aging society is putting an increased burden on the NHS, and the Conservatives can argue that they put more money into the service and that the health department is one of the government’s so-called protected departments when it comes to setting budgets.

The counter argument, though, is that austerity in other areas has fueled much of the strain on the NHS over more than a decade. Cuts in social care provision by cash-strapped local councils, for example, has had a knock-on effect on overcrowding in hospitals unable to discharge vulnerable patients.

In his speech, Starmer said the NHS entered the pandemic in 2020 in a more fragile state than comparable nations. It’s a similar theme when the prime minister talks about the UK’s fragile economy, that the problems are of the former Conservative administration’s making.

“The last government broke the NHS,” Starmer said. “It is unforgivable and people have every right to be angry.”

--With assistance from Irina Anghel.

(Updates with health department spending, austerity impact four paragraphs from bottom.)

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