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31 January 2013
Health and social care could account for half of all government spending in 50 years' time, according to a new report published today by The King's Fund.
The report, Spending on health and social care over the next 50 years, shows how changes to the population, increases in wealth and medical advances will increase pressures to spend more on health and social care in the future. The ageing population will also be a factor although – contrary to popular perception – this is likely to drive only a small proportion of the increase.
The UK currently spends around 9 per cent of its national income on health and social care, more than twice as much as 50 years ago. This could more than double again to nearly 20 per cent by 2061, according to forecasts by the Office for Budget Responsibility. Based on projections for economic growth and current levels of taxation and government expenditure, the report estimates that this would translate to around 50 per cent of public spending.
The report stresses that increases on this scale are not inevitable and depend on a number of factors. However, it highlights the potentially significant implications for the public purse and other government budgets if spending on health care continues to follow historic trends. This suggests that difficult choices lie ahead about how much to spend and how to fund this.
The report calls for an informed public debate about these choices – including whether taxation or borrowing should rise to pay for increased spending or the scope of publicly funded services should be limited, with individuals paying more through user charges or private insurance. It also recommends that regular reviews of spending pressures should be commissioned – like the analysis undertaken by Sir Derek Wanless for the Treasury in 2002 – to inform public debate and future spending decisions.
The report also compares the situation in the UK with that in other countries. This shows that spending on health and social care in the UK is currently around the average among industrialised nations and that other countries are facing similar pressures to spend more in the years ahead.
John Appleby, Chief Economist at The King's Fund and author of the report, said: 'While there is nothing inevitable about spending on health and social care continuing to increase in line with historic trends, the pressure to spend more is likely to see it consuming an ever-larger proportion of national income. It is time to think much more long term about how much we should spend, the benefits of this spending and how it should be paid for. By turning the spotlight on these issues now, we hope to stimulate an informed debate about the difficult choices ahead.'
The King's Fund will look at these issues in more detail in the months ahead as part of its Time to Think Differently programme which aims to stimulate debate about how to address the future challenges facing health and social care.
Read the full report: Spending on health and social care over the next 50 years: why think long term?
Find out more about our Time to Think Differently programme