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Friday, 3 March, 2000, 03:01 GMT
Blair's health pledge 'flawed'
Patients on trolleys
NHS faces funding pressures
Claims from the prime minister that UK health spending will catch up with other European countries are based on miscalculations, say economic experts.

Tony Blair has pledged to raise spending on all health care to the European Union average of 8% of gross domestic product (GDP) by 2006.

But the Office of Health Economics (OHE) disputes the government's claim that planned increases in spending will meet that target - and they say other EU countries actually spend more then 8%.


Without additional funds, the NHS will struggle to meet the government's ambitious agenda for a more effective and consumer responsive, 'modernised' health service

Adrian Towse, Office of Health Economics
The UK currently spends 6.7% of GDP on health care and the government plans to catch up with the rest of the EU by increasing funding by 5% in real terms - after inflation - each year until 2006.

Mr Blair's pledge, made on television in January, was dependent on growth continuing at current rates and caused a storm in Whitehall.

Adrian Towse, director of the OHE, says in a report in the British Medical Journal that the government's calculations are flawed in several ways.

He claims that achieving the 8% target would really require a 5.8% real terms rise in spending each year until 2006.

He adds that the 8% EU average is miscalculated because it gives equal weighting to small countries such as Luxembourg compared to the biggest nations, including Germany.

The UK's low spending on health was bringing the average down and 9.1% was a more realistic figure, he claimed.

Comparisons

And he says international comparisons are problematic because of differences in definition of health spending, including issues such as whether nursing home spending is included and the proportion spent on private health care.

Mr Towse said: "Without additional funds, the NHS will struggle to meet the government's ambitious agenda for a more effective and consumer responsive, 'modernised' health service.

"Mr Blair's spending target of 8% of GDP is less than that currently being spent on health care in the EU, and, even if it were the EU average, a 5% real annual growth in NHS funding would be insufficient to achieve it by 2006."

The Department of Health said the government's calculation of average spending was based on the Organisation of Economic Co-operation and Development's standard practice.

A spokesman said: "The article contains inaccuracies which invalidate the calculations." He pointed to the OHE's claim that NHS - as opposed to overall health care - spending as a proportion of GDP would be 5.8% in 2000. The real figure was 6%, he claimed.

"This means the whole basis on which the OHE has made its projections is incorrect," he added.

Reiterated

The prime minister reiterated his position on NHS funding in a letter to British Medical Association chairman Dr Ian Bogle on Thursday.

Mr Blair said: "Levels of public spending are dependent on economic performance. However, this year and the next two years we are increasing spending on the NHS by an average of 5% in real terms.

Dr Ian Bogle
Dr Ian Bogle: 'Response is disappointing'
"If we continue to manage the economy properly then I am confident that we will be able to sustain increases in funding for the NHS at that sort of level to reach the EU average."

Dr Bogle said: "The response is disappointing in that it doesn't answer the specific questions we have about funding.

"But he is the first prime minister I have known during my time who has recognised funding deficiencies in the health service and he has started to do something about it."

Shadow health secretary Dr Liam Fox said: "The prime minister made this commitment to get himself out of a difficult question during a television interview.

"It was nothing to do with considered government policy, nor at any time has it been realised within the funding constraints which the chancellor has imposed."

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