The announcement from Moody’s this morning on the UK’s credit rating is another warning that spending cannot stay as it is on public services, and this of course includes health, the biggest burden. As I wrote for the Daily Mail yesterday:
The fundamental reason for change (i.e. what should be made clear but isn’t with the Health Bill) is that we cannot afford the NHS to carry on as it is! We need to plan and improve it so we can look after the sick and elderly in the future without the NHS being a massive tax-burden.
So the first time-bomb we need to diffuse is the economic one. The credit rating agency Standard and Poor have given us warnings. Firstly we have at least 20 hospitals that are in such a financially bad way that they will need massive subsidies of tax-payers money to keep them viable. Secondly, they have also warned that rising health costs with no policy change will mean that within the next 3 years, some G20 countries will have their healthcare-related credit downgraded. We could be one of them, especially if the economy doesn’t grow and our health spending does. If we are downgraded, the cost of borrowing rises and spending on health and social care would have to be slashed.
Therefore we need to welcome more private investment in the NHS, from providers, research and from individuals. To do this the Bill enables hospitals to raise their private income cap. This will mean that they can increase income from private patients, take part in more research and clinical trials, offer office or laboratory space to e.g. small biotechnology companies. All with NHS services being protected by law.
The Bill also encourages more services to be delivered by independent companies (who pay their own overheads, staff pensions and development costs), thus saving the NHS money.
One of the big mistakes over the past months has been for the coalition to allow there to be both perceived public-private fight and real anti-business sentiments. The NHS already spends 28% of its budget in the independent sector, depending on it for everything from IT support to drugs to physio. It is an example of a fantastic partnership. Yet investor confidence is rock bottom. Those who risked setting up new businesses in the past to support the NHS have had precious little political support or appreciation. Those that want to supply services are still being stymied by banks delaying their lending decisions – what use to take 3 months now takes 12 – by which time circumstances have often changed.
I am no fan of businesses who give themselves big bonuses or make excessive profits. But the NHS has to welcome both ethical business support and more private patients. I’d like to know from where else opponents think they are going to raise the money without jeopardising our entire economy.