Lansley’s inflated sense of his own department’s spending

The listening is over, now for the legislating. But if you’re keen to find out how Andrew Lansley’s health reforms will look in the end, then don’t expect many clues in his article for the Telegraph today. Aside from some sustained hints about involving “town halls” and “nurses” in the process, this is really just another explanation of why the NHS needs to change — not how it will change.

Lansley’s central justification is one that he has deployed with greater frequency over the last few weeks: that, without change, the NHS will become too cumbersome and costly a beast. Thanks to the pressures of an ageing population, more expensive treatments and technological development, he says, the service would face a funding gap of £20 billion in 2015, were the government not to act now.

It’s a striking argument, especially as it involves the Health Secretary pushing the case for savings, rather than for increased spending as an end in itself. But he still cannot avoid making a suggestion about the government’s health spending that is rather galling. A funding gap might arise, he writes, “despite the Government’s provision of an additional £11.5 billion in funding.” It’s a figure that Lansley has used before, and that was repeated by Louise Bagshawe on Question Time last week. But it fails to properly capture the truth of the situation.

What Lansley is doing is referring to the cash figures for health spending, which stand at £102.9 billion now and £114.4 billion in 2014-15 — hence the £11.5 billion increase. But, as CoffeeHousers will know, the real terms figures, which account for inflation, are a more useful guide to the spending power of the health service. After all, £114.4 billion of today’s money will buy fewer ambulances and hospital beds in 2015 than it could now. Here’s the difference in graph form:

Which is to say that, on current projections, health spending will remain flat — or even decrease — when inflation is accounted for. Of course, Lansley isn’t going to trumpet this, not least because it suggests that the Tories might break their famous health spending pledge unless they shovel more cash on the NHS in future Budgets. But it’s still misleading of him to emphasise the cash figures, just as it was when Gordon Brown did similar. CoffeeHousers should remain sceptical, ever sceptical.