Liberal Demcrats pledge to meet NHS £8bn shortfall

North Norfolk MP Norman Lamb

North Norfolk MP Norman Lamb - Credit: Archant

A multi-billion pound black hole in the National Health Service would be filled by ploughing the proceeds of future economic growth into public services, under Liberal Democrat plans.

Nick Clegg said his was the only party able to show how it would meet 'in full' the increase of £8 billion a year by 2019/20 NHS chief executive Simon Stevens says is required to prevent it collapsing.

Under the blueprint, the additional £2 billion announced by Chancellor George Osborne for 2015/16 in the Autumn Statement would be repeated every year of the next parliament - though officials were unable to identify where that cash would be found in future.

Another £1 billion a year from 2016/17 would come from a pension tax relief and dividend tax squeeze on high earners, and ending the Conservative 'shares for rights' policy - a move agreed at the party's conference.

The bulk of the boost would come, however, from the Lib Dems' pledge to increase public spending in line with the growth of the economy after eliminating the structural deficit in 2017/18.

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Mr Clegg - whose election campaign is centred on the need for his party to be in coalition to temper the 'excesses' of either a Tory or Labour government - is keen to set the running on what promises to be a central election issue.

Mr Stevens yesterday warned of a public backlash unless the next administration made a 'thoughtful, sequenced series of annual real funding increases, building on next year's 'downpayment', against which the health service can plan and make the necessary efficiencies'.

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An ageing population and expensive new treatments have put a serious squeeze on the NHS and the chief executive believes that the budget must be at least £8 billion higher in real terms by 2020 just to keep going - even after more efficiency measures.

Challenging other parties to match the spending commitment, Mr Clegg said: 'The Liberal Democrats are the first party to have a fully worked-up plan to meets the financial needs - the £8 billion of extra money for the NHS by the end of next parliament - as set out by Simon Stevens.

'We are setting out today a plan about how we can meet that funding gap that has been independently identified as necessary to make sure that our NHS is protected, cherished and supported now and long into the future.

'The big, big difference between ourselves and Labour and the Conservatives is that we have said that once we have dealt with the structural deficit, once we have dealt with it in 2017/18, we will link the amount of money going into public services - including the NHS - to the growth of the economy.

'The Conservatives have not done that at all - they actually want to see the proportion of money going into public services remorselessly decline as a proportion of our national wealth for ideological reasons.

'Labour will still be paying off much, much more interest on our accumulated debts because they haven't committed to the timetable by which we would deal with the deficit. Money which instead could be spent on hospitals.

'So, we are the only party that, by managing things responsibly and in a balanced way ... can meet the Simon Stevens challenge and meet it in full.'

The Liberal Democrat plans are based on the economy recovering in line with current projections made by the Office for Budget Responsibility - giving sufficient spare capacity to add at least £2.5 billion a year to NHS spending in the final two years of the parliament.

That would take it to the £8 billion figure called for by Mr Stevens.

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