IMF casts doubt on NHS finance17th March 2006
The International Monetary Fund, based in Washington, issued a warning over Britain's health care bill.
It said that the Government may have massively under-estimated future growth of NHS costs. It estimated that huge tax rises or spending cuts could be inevitable in the years ahead if the Government was to satisfy the growing financial demands of the health sector.
The IMF said, in its annual survey of the British economy, that while the Government's accounts had improved after Mr Brown raised North Sea oil taxes, they had failed to take on board the potential costs of an ageing population, which would have significant implications for health spending. It said that the average person aged 65 or over costs the UK health system about five times more than the average person under 65.
The conclusion of the IMF is that healthcare spending could rise by about six percentage points of GDP between 2007 and 2050. This is significantly higher than the Government's projections of 1.5 percentage points. This difference between the two positions is equivalent to more than £50 billion in today's terms, based on the current size of the economy. It would equate to an extra 17p on the basic tax rate.
The forecasts underline the question of whether public funding will be sufficient to keep the NHS fully operational. A spokesman for the Treasury said their own projections on health spending over coming decades are based on official population projections and cautious assumptions regarding future trends in healthy life expectancy. They went on the say that the IMF's projection is based on various assumptions including technological change which are highly uncertain, and which may in reality lead to cost savings.
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Title: IMF casts doubt on NHS finance
Author: Sue Knights
Article Id: 146
Date Added: 17th Mar 2006